DJIA Components' Dividends Represent 38% of Total U.S. Stock Market Payouts
Dividend Data Provides Insight Into Outlook of Bellwether U.S. Corporations, Dow Jones Indexes' Krein Says
NEW YORK, July 19, 2011 (GLOBE NEWSWIRE) -- The Dow Jones Industrial Average's 30 component companies are expected to increase their annual dividend payout by 12.66% year-over-year and 2.93% from the previous quarter, according to a second-quarter 2011 survey by Dow Jones Indexes.
DJIA component companies' $101.6 billion expected distribution for the 12 months beginning July 1, 2011 represents 38% of all indicated annual dividends (IAD) by American companies as measured by the Dow Jones U.S. Index, a gauge that accounts for roughly 95% of the U.S. equity market. (Indicated annual dividend is a forward-looking measure defined as a company's most recently paid quarterly dividend multiplied by four.)
For the quarters ended March 31, 2011 and June 30, 2010, DJIA component companies paid $98.7 billion and $90.1 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.
The 10 largest dividend distributions in the U.S. market – by total estimated payout – are all DJIA component companies: AT&T (NYSE:T): $10.2 billion IAD, or $1.72 per share; Exxon Mobil (NYSE:XOM): $9.2 billion, $1.88; Pfizer (NYSE:PFE): $6.4 billion, $0.80; General Electric (NYSE:GE): $6.4 billion, $0.60; Chevron (NYSE:CVX): $6.2 billion, $3.12; Johnson & Johnson (NYSE:JNJ): $6.2 billion, $2.28; Procter & Gamble (NYSE:PG): $5.8 billion, $2.10; Verizon (NYSE:VZ): $5.5 billion, $1.95; Microsoft (Nasdaq:MSFT): $4.7 billion, $0.64; and Merck (NYSE:MRK): $4.6 billion, $1.52.
Annually, AT&T, Exxon Mobil and Pfizer – the top three payers – would account for 9.73% of all dividends paid by the stocks included in the Dow Jones U.S. Index.
Since the end of 2011's first quarter, 10 DJIA companies have increased their per-share dividends: Hewlett-Packard (NYSE:HPQ) 50%, IBM (NYSE:IBM) 15.38%, Travelers (NYSE:TRV) 13.89%, United Technologies (NYSE:UTX) 12.94%, Procter & Gamble 8.98%, Chevron 8.33%, General Electric 7.14%, Exxon Mobil 6.8%, Johnson & Johnson 5.56%, and Caterpillar (NYSE:CAT) 4.55%. And with Cisco System's (Nasdaq:CSCO) first-ever dividend distribution on April 20, 2011, all Dow component companies now have cash-dividend programs.
Compared with the Dow Jones U.S. Index, Dow component companies' dividend yield (indicated annual dividend divided by market capitalization) was higher by 69 basis points -- 2.57% vs. 1.88%. The Dow companies' five-year, weighted average-dividend-growth rate was 11.28%, compared with the Dow Jones U.S. Index's 14.73%.
"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 trends and other useful indications that enable investors to make informed decisions about their investment portfolios."
The complete 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.
Journalists may e-mail questions regarding this press release to media@djindexes.com.
About Dow Jones Indexes
Dow Jones Indexes (www.djindexes.com) is a leading full-service index provider that develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products. Best-known for the Dow Jones Industrial Average, Dow Jones Indexes offers more than 130,000 equity indexes as well as fixed-income and alternative indexes, including measures of hedge funds, commodities and real estate. Dow Jones Indexes employs clear, unbiased and systematic methodologies that are fully integrated within index families. Dow Jones Indexes is part of a joint venture company owned 90 percent by CME Group Inc. (www.cmegroup.com) and 10 percent by Dow Jones & Company, Inc. (www.dowjones.com), a News Corporation company (Nasdaq:NWS) (Nasdaq:NWSA); (ASX:NWS) (ASX:NWSLV) (www.newscorp.com).
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