In an article by Saqib Iqbal Ahmed of Reuters, S&P Global research showed dividend payments to investors in the S&P 500 rose to a new record in 2020.
Dividend payments rose 0.7% to $58.28 a share from the previous record set in 2019.
Howard Silverblatt, senior index analyst for S&P and Dow Jones indices, noted a record dividend payment in the 1st quarter of 2020 and a stronger than expected payment in the 4th quarter led to record payouts to investors.
For 2021, Mr. Silverblatt currently sees dividend payments setting its 10th consecutive record year up 4.2%. Tesla is now included in the S&P 500 but does not pay a dividend, if you take Tesla out the index, payout would be 5.9%.
Interest rates remain low and boosting dividends helps bring more investors to buying stocks.
Linking to dividend paying stocks, companies look to alternatives to determine what level of dividends they will pay. In financing there are always choices – issue debt, equity or a combination of both. At the moment and for the next year or as long as COVID rages, interest rates will be low and investing in dividend paying stocks is a very good choice.
There are more questions than answers, till the next time – to raising questions.