S&P 500 Dividend Payouts Head Toward New Record in Rebound From Pandemic

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S&P 500 dividends are on pace to set a new record of $525 billion over the next year — yet another sign of how much these payouts have rebounded since earlier in the pandemic.

 “Companies are paying more” in dividends, says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, which compiles data on dividends. “They are starting to feel a little better.”

Silverblatt expects the dividend rebound to continue, barring any major setbacks from Covid along the lines of the recent lockdown in Austria.

The $525 billion annual indicated dividend rate for the S&P 500 is based on what companies are paying right now. That number is likely to go higher as companies continue to boost their dividends.

Still, $525 billion is a hefty sum and exceeds the market capitalizations of companies such as JPMorgan Chase (ticker:JPM) and Home Depot (HD).

The pandemic took a big toll on dividends as many companies suspended or cut their payouts, while others maintained them at current levels. Companies such as Johnson & Johnson (JNJ) and Procter & Gamble (PG) did put through dividend increases early in the pandemic.

In February of 2020, before the pandemic took hold, the annual indicated dividend rate for the S&P 500 was $507 billion but that dropped to $464 billion in July of that year.

Silverblatt also points out that the S&P 500 dividends have recovered faster than they did during the Great Recession in 2008 and 2009.

“They have recovered quicker, and they are on the way up,” he says.

Write to Lawrence C. Strauss at lawrence.strauss@barrons.com