S&P 500 Total Dividend Growth Charts

While dividend size is not the primary driver of my investment decisions, I still love seeing dividend distributions arrive in my brokerage account and consider them a critical part of my portfolio’s total return.

Eddy Elfenbein of Crossing Wall Street created the chart below, plotting both the S&P 500 index value (blue) and its dividends (red). The vertical axes are scaled 50:1, so that when they cross the dividend yield is 2%. We see that while dividends don’t always go up in the short term, they have been bouncing back and growing along with stock prices today (unlike during the dot-com boom).

 

If you take a step back and look at the bigger picture, Multpl.com has a chart showing the dividend growth for the S&P 500 on a real (inflation-adjusted) basis since 1870. While the dividend yield remains at historical lows, the total amount of dividends still appear to grow faster than inflation over longer (10+ year) periods. Note the vertical axis is on a log-scale.

Comments

  1. James Cash says:

    I’m an investor in the UK and like you I love to see divedend growth. It’s been a hard few years but finally I think globally Divedends are looking like they are on a steady increase :)

  2. Working through the math:

    (33.82 / 4.59) ^ (1/142.5) = 1.4% annualized real growth in dividends

    I would have expected something closer to 3%, as I would expect the real growth in dividends to be close to real growth in GDP over the very long run. Payout ratios used to be higher in the old days, and factoring that in brings it close to 2%. Still, we are missing about one percent a year. I’m wondering if this is the one percent “leakage” that some academics talk about, where issuance of new stock and so forth is leaking valuations about 1% per year.

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