The Outlook For Dividends
Kiplinger's Personal Finance|July 2019

A few companies are cutting them, but payouts are healthy overall.

John Waggoner

If cash were grass, it would be up to the third-floor windows on Wall Street. And yet, despite all the money sitting on corporate balance sheets, such noteworthy companies as General Electric (symbol GE) and Anheuser-Busch InBev (BUD) have slashed their dividends in the past 12 months. And dividend growth overall is expected to slow in 2019.

Should income-hungry investors worry? No. The economy is still strong, and companies are flush. But it never hurts to examine your dividend holdings to make sure a dividend cut doesn’t catch you by surprise—and to see if there are better dividend opportunities around.

Aside from providing income, dividends are an important part of the stock market’s total return. Over the past 20 years, Standard & Poor’s 500stock index has gained 3.9% annually without dividends and 5.9% annually with dividends. Without dividends, a $10,000 investment in the index made in May 1999 would be worth $ 21,494 today. Add in dividends and your account would be worth $31,472, or 46.4% more.

IHS Markit estimates that U.S. firms will pay out $628.3 billion in dividends this year, up 8.1% from 2018. Thanks to rising oil prices, the energy industry is likely to see robust dividend growth in 2019, according to the research firm. Some tech companies will be among the most generous.

For example, Markit expects software giant MICROSOFT (MSFT, $128), yielding 1.4%, to boost its payout roughly 9% this year. (Prices, yields and other data are through May 17.)

Still, the expected overall dividend growth rate is below last year’s 10.6% pace, which was boosted by the 2017 Tax Cuts and Jobs Act. The legislation cut the average effective tax rate of S&P 500 firms to 13.2% in the fourth quarter of 2018 from 20.4% in the same quarter in 2017, giving companies lots of extra cash, some of which they shared with investors.

Off track.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM KIPLINGER'S PERSONAL FINANCEView All

Think Twice About Applying for Credit

Credit card issuers are offering a lot of incentives, but your credit score could suffer.

3 mins read
Kiplinger's Personal Finance
October 2021

A Simple Portfolio Is All You Need

It’s possible to build wealth with only a few funds—or even just one.

5 mins read
Kiplinger's Personal Finance
November 2021

Credit Versus Debit

Credit cards offer more protections and rewards, but debit cards reduce the temptation to overspend.

2 mins read
Kiplinger's Personal Finance
November 2021

Introducing the Kiplinger ESG 20

Our picks have profit potential and are tackling today’s environmental, social and governance challenges.

10+ mins read
Kiplinger's Personal Finance
November 2021

Ratcheting Up Risk

You can invest your retirement savings in everything from cryptocurrency to penny stocks. But that doesn’t mean you should.

10+ mins read
Kiplinger's Personal Finance
November 2021

Don't Give Up on Small-Cap Stocks

STREET SMART

5 mins read
Kiplinger's Personal Finance
November 2021

How Do Your Finances Stack Up?

A new study of retirees’ financial profiles is revealing and sometimes surprising.

2 mins read
Kiplinger's Personal Finance
November 2021

GUIDE TO OPEN ENROLLMENT

Health care costs continue to climb, but subsidies will make some plans more affordable.

10+ mins read
Kiplinger's Personal Finance
November 2021

Like the Mutual Fund? Meet the ETF

Some portfolio managers are bringing their star power to exchange-traded versions of their funds.

7 mins read
Kiplinger's Personal Finance
November 2021

YOUR SALARY MAY BE BIGGER NEXT YEAR

In a strengthening labor market, businesses are paying more to attract and retain employees.

2 mins read
Kiplinger's Personal Finance
November 2021
RELATED STORIES

Dividends: What's Not To Love?

Owners of mining shares are enjoying super dividends. Simon Brown explains why a dividend is such an important part of investment.

3 mins read
Finweek English
20 August 2021

एनबीएफसी के लिए लाभांश नियम सख्त

भारतीय रिजर्व बैंक (आरबीआई) ने कुछ मानदंडों के आधार पर गैर-बैंकिंग वित्तीय कंपनियों (एनबीएफसी) की लाभांश भुगतान के नियम सख्त कर दिए हैं। इन मानदंडों में संबंधित एनबीएफसी के खाते में फंसा कर्ज कितना है और उसका सही से खुलासा किया गया है या नहीं आदि को शामिल किया गया है । शुद्ध मुनाफे का जितना हिस्सा किसी साल में लाभांश दिया जा सकता है उसे लाभांश अनुपात कहा जाता है।

1 min read
Business Standard - Hindi
June 25, 2021

वित्त मंत्रालय ने मांगा अधिक लाभांश

• वित्त मंत्रालय ने कहा, वित्त वर्ष 2022 में ज्यादा लाभांश देना सुनिश्चित करे आरबीआई• स्वर्ण मुद्रीकरण की संभावनाओं पर भी मांगी आरबीआई से सलाह • आरबीआई ने सरकार के उधारी कार्यक्रम को सुगमतापूर्वक पूरा करने का दिया भरोसा

1 min read
Business Standard - Hindi
February 18, 2021

आरबीआई देगा ज्यादा लाभांश !

पिछले वित्त वर्ष में भी केंद्रीय बैंक ने सरकार को तयशुदा से अधिक लाभांश दिया

1 min read
Business Standard - Hindi
June 30, 2020

Buy Quality Dividend Stocks!

Focusing on quality dividend yield stocks right now could prove to be most rewarding for investors going ahead. Yogesh Supekar and Geyatee Deshpande highlight the importance of having quality dividend stocks in the portfolio and share a list of high dividend stocks for investors' consideration.

7 mins read
Dalal Street Investment Journal
September 02, 2019