Ultra-low interest rates and “easy money” from the Fed over the last few years have led to a number of consequences, notably large U.S. businesses have become so awash with cash that they have been giving it back to shareholders at record levels through stock buybacks and dividend distributions.
A September 28th report from FactSet Insight highlights that aggregate dividend payments totaled up to $105 billion at the end of the second quarter, a new 10-year high for the S&P 500.
Also of note, 2Q was the ninth quarter in a row that that dividends in the S&P 500 increased and the fifth consecutive quarter that dividend payments hit new highs. On a trailing twelve-month basis, the total dividend pay out came to $399.3 billion. The second quarter also marked the sixth quarter in a row that the index hit a 10-year high. As of the end of the second quarter, dividend payments were almost 45% higher than the 10-year TTM average of $274.5 billion.
Digging into second quarter S&P 500 dividends
FactSet Research Analyst Andrew Birstingl notes that at the sector level, the total dividend payments of all S&P 500 sectors were above their 10-year averages. The Financials and IT sectors led all groups in terms of aggregate dividend payouts. The Financials sector saw dividend payouts of $67.7 billion in the quarter, and IT paid out $59.6 billion in dividends. Of interest, four out of the top 10 companies by TTM dividends paid out were in these two sectors (AAPL, MSFT, WFC, and JPM).
Apple and Microsoft were ranked first and second for TTM dividends from the IT sector. Apple paid out more than $3.1 billion in dividends in the second quarter and $11.4 billion during the prior 12 months. The iPhone maker also boosted its dividend by 11% to $0.52 per share this spring.
Microsoft was third overall ranked by dividends paid, as the software firm distributed $2.5 billion in dividends in the second quarter and $9.9 billion in the TTM.
Wells Fargo and JPMorgan were the two banks to make the top 10 dividends paid list. Both financial institutions were given permission by the Federal Reserve to go ahead with their proposed dividend payouts. Wells Fargo boosted its dividend 7% to $0.37 per share and distributed $2.2 billion in dividends during the second quarter (TTM: $8.6 billion), and J.P. Morgan upped its dividend 10% to $0.44 per share and paid out $2 billion in dividends in the second quarter (TTM: $7.4 billion).
Birstingl also highlights that Exxon Mobil and Chevron stayed on the top 10 dividend payers list this quarter, even though oil prices and sales were down. Exxon in fact remained atop the list, disbursing more than $11.8 billion in dividends in the TTM.