NIPA vs. S&P 500 Dividends
Corporate Finance Briefing: NIPA vs. S&P 500 Dividends
Yardeni Research, Inc.
February 1, 2023
Dr. Edward Yardeni
516-972-7683 eyardeni@
Joe Abbott
732-497-5306 jabbott@
Mali Quintana
480-664-1333 aquintana@
Please visit our sites at blog.
thinking outside the box
Dividends
Figure 1.
2000
DIVIDENDS IN CORPORATE PROFITS (billion dollars, 4-quarter sum)
1800
1600
Dividends
1400
All Corporations (1704.9)
Nonfinancial Corporations (988.0)
S&P 500 (562.9) 1200
2000
1800 Q4
1600
1400
1200
1000
Q3
1000
800
800
600
Q4
600
400
400
200
200
0
0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Source: Federal Reserve Board, Financial Accounts of the United States, Standard & Poor's and Bureau of Economic Analysis.
Figure 2.
80
S&P 500 DIVIDEND YIELD 75 (trailing 4-quarter sum)
70
65
Invested in 1970 (77.6)
60
Invested in 1980 (49.3)
55
Invested in 1990 (20.2)
50
Invested in 2000 (5.1)
Invested in 2010 (5.3)
45
40
80 Q4
75
70
65
60
55
50
45
40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26
Source: Standard & Poor's Corporation.
Page 1 / February 1, 2023 / NIPA vs. S&P 500 Dividends
Yardeni Research, Inc.
Dividends
Figure 3.
20
20
TREASURY BILL YIELD VS S&P 500 DIVIDEND YIELD
(percent)
15
15
Three-Month Treasury Bill Yield S&P 500 Dividend Yield*
10
10
5
5
Jan
Q4
0
0
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 28
* S&P 500 four-quarter trailing dividends per share divided by quarterly closing value of the S&P 500 index. Source: Standard & Poor's and Federal Reserve Board.
Figure 4.
150.2
125.2 S&P 500 DIVIDENDS & RETAINED EARNINGS PER SHARE 100.2 (dollars, trailing 4-quarter sum, ratio scale)
75.2
50.2
25.2 Dividends Retained Earnings*
150.2 125.2 100.2
Q4
75.2
50.2
25.2
.2
.2
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26
* Reported earnings minus dividends per share. Source: Standard & Poor's.
Page 2 / February 1, 2023 / NIPA vs. S&P 500 Dividends
Yardeni Research, Inc.
Dividends
Figure 5.
100
100
S&P DIVIDEND PAYOUT RATIOS*
(percent)
80
S&P 500
80
S&P Industrials
60
60
40
40
Q3
20
20
0
0
100
100
S&P 500 COMPANIES PAYING A DIVIDEND
95 (percent of total)
95
90
90
85
85
80
2022
80
75
75
70
70
65
65
46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 28
* Four-quarter trailing dividends per share divided by four-quarter trailing reported earnings. Source: Standard & Poor's Corporation and FactSet.
Figure 6.
150
150
DIVIDEND PAYOUT RATIOS (percent)
100
100
50
Dividend Payout Ratios
NIPA as Percent of NIPA
0
After-Tax Profits* (66.2) S&P 500 as a Percent of S&P 500
Reported Net Income(37.5)
Q3 50
Q3
0
-50
-50
64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26
* From Current Production. Including IVA & CCadj. These two adjustments restate the historical cost basis used in profits tax accounting for inventory withdrawals and depreciation to the current cost measures used in GDP. Source: Federal Reserve Board, Financial Accounts of the United States, Standard & Poor's and Bureau of Economic Analysis.
Page 3 / February 1, 2023 / NIPA vs. S&P 500 Dividends
Yardeni Research, Inc.
Dividends
Figure 7.
18
18
S&P 500 FORWARD EARNINGS YIELD vs DIVIDEND YIELD
(percent)
16
16
14
14
S&P 500 Dividend Yield* (1.74)
12
S&P 500 Forward Earnings Yield** (5.74)
12
10
10
8
8
6
Jan
6
4
4
2
Q4
2
0
0
79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25
* S&P 500 four-quarter trailing dividends per share divided by quarterly closing value of the S&P 500 index. ** S&P 500 12-month forward consensus expected operating earnings divided by S&P 500 stock price index.
Source: Standard & Poor's and Federal Reserve Board.
Figure 8.
18
18
THREE-MONTH TREASURY BILL YIELD vs. S&P 500 FORWARD EARNINGS YIELD
(percent)
16
16
14
14
Three-Month Treasury Bill Yield (4.53)
12
S&P 500 Forward Earnings Yield* (5.74)
12
10
10
8
8
6
Jan
6
Jan
4
4
2
2
0
0
79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25
* S&P 500 12-month forward consensus expected operating earnings divided by S&P 500 stock price index. Source: Standard & Poor's and Federal Reserve Board.
Page 4 / February 1, 2023 / NIPA vs. S&P 500 Dividends
Yardeni Research, Inc.
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