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The Dow Jones Industrial Average‘s 30 component companies are expected to increase their annual dividend payout by 12.34% for 2012 compared with 2011, according to a survey by Dow Jones Indexes.
The expected annual dividend distribution as of the end of 2011’s fourth quarter will rise by 1.94% from the previous quarter, the survey also indicates.
DJIA component companies’ $104.7 billion expected dividend distribution for the 12 months beginning January 1, 2012, represents 38% of all indicated annual dividends (IAD) by U.S. companies as measured by the Dow Jones U.S. Index, a gauge that accounts for roughly 95% of the U.S. equity market. (IAD is a forward-looking measure defined as a company’s most recently paid quarterly dividend multiplied by four.)
For the quarters ended September 30, 2011 and December 31, 2011, DJIA component companies paid $102.7 billion and $93.2 billion in IAD, respectively.
“As is the case with most information gleaned from Dow Jones Industrial Average’s component companies, this dividend data provides meaningful insight into the strategic outlook of bellwether U.S. corporations,” said David Krein, Senior Director, Product Development and Analytics, at Dow Jones Indexes.
Nine of the 10 largest dividend distributions in the U.S. market – by total estimated payout – are DJIA component companies: AT&T, $10.5 billion IAD, or $1.76 per share; Exxon Mobil, $9.1 billion, $1.88; General Electric, $7.2 billion, $0.68; Chevron, $6.5 billion, $3.24; Johnson & Johnson, $6.2 billion, $2.28; Pfizer, $6.2 billion, $0.80; Microsoft, $6.0 billion, $0.80; Procter & Gamble, $5.8 billion, $2.10; and Verizon, $5.7 billion, $2.00.
Annually, AT&T, Exxon Mobil and General Electric – the top three payers – would account for 9.57% of all dividends paid by stocks included in the Dow Jones U.S. Index.
Since the end of 2011’s third quarter, eight DJIA companies have increased their per-share dividends: Disney, by 50.00%; Home Depot, 16.00%; McDonalds, 14.75%; General Electric 13.33%; Merck, 10.53%; Boeing, 4.76%; Chevron 3.85%; and AT&T 2.33%.
Compared with the Dow Jones U.S. Index, Dow component companies’ dividend yield (IAD divided by market capitalization) was higher by 61 basis points, or 2.71% vs. 2.10%. The DJIA companies’ five-year, weighted average-dividend-growth rate was 15.04%, compared with the Dow Jones U.S. Index’s 25.13%.
“One of the market’s subtle truisms is that many investors track the DJIA for more than just its day-to-day pricing figures,” Mr. Krein said. “As we can see with the dividend information, there is much to be learned about the broad U.S. market by mining The Dow’s component companies’ data for useful indications that enable investors to make informed decisions about their investment portfolios.”
The complete DJIA dividend analysis, along with additional data, can be found at http://www.djindexes.com/literature/?go=analyticsandresearch.
The Dow Jones Industrial Average is owned by Dow Jones Indexes, a leading global index provider.
