S&P 500 Dividend & Earnings Yield - Yardeni Research

S&P 500 Dividend & Earnings Yield

Yardeni Research, Inc.

October 12, 2023

Dr. Ed Yardeni

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Joe Abbott

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Table Of Contents Table Of Contents

S&P 500 Earnings Yield

3-13

October 12, 2023 / S&P 500 Dividend & Earnings Yield

Yardeni Research, Inc.



S&P 500 Earnings Yield

Figure 1.

15

S&P 500 DIVIDEND YIELD vs CPI INFLATION RATE & STOCK MARKET CYCLE

10

S&P 500 Dividend Yield

Nominal* (1.62)

Real** (-2.51)

5

0

15

10

5 Q3

0

-5

-5



-10

-10

47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25 27

* S&P 500 four-quarter trailing dividends per share divided by quarterly closing value of the S&P 500 index. ** Nominal dividend yield minus CPI inflation rate on y/y basis using quarterly data based on 3-month averages.

Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: Standard & Poor's and Bureau of Labor Statistics.

Figure 2.

25

25

S&P 500 REPORTED EARNINGS YIELD* vs CPI INFLATION RATE**

20

20

15

S&P 500 Earnings Yield*

15

Nominal (4.62)

Real** (0.65)

10

10

5

Q2

5

0

Q2

0

-5

-5



-10

-10

35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 20 25 30

* S&P 500 reported earnings as a percent of quarterly average S&P 500 index. Q4-2008 deleted because of negative value. ** Nominal earnings yield minus CPI inflation rate on y/y basis using quarterly data based on 3-month averages.

FN3 Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: Standard & Poor's and Bureau of Labor Statistics.

Page 3 / October 12, 2023 / S&P 500 Dividend & Earnings Yield

Yardeni Research, Inc.



S&P 500 Earnings Yield

Figure 3.

12

S&P 500 REPORTED EARNINGS YIELD* MINUS CPI INFLATION RATE**

9

12 Latest (0.65)

9

6

6

3 Average 3.19

0

3

Q2 0

-3

-3



-6

-6

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 reported earnings as a percent of quarterly average S&P 500 index. Q4-2008 dropped because of large negative value. ** Year-over-year percent change in three-month average of each quarter.

Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas are bull markets. Source: Standard & Poor's and Bureau of Labor Statistics.

Figure 4.

18

US EQUITIES REPORTED EARNINGS YIELD* MINUS CPI INFLATION RATE**

16

18 Latest (0.72)

16

14

14

12

12

10

10

8

8

6

Average = 4.9

6

4

4

2

2

Q2

0

0

-2

-2

-4

-4



-6

-6

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

* Ratio of after-tax corporate profits as reported to the IRS divided by market value of US equities traded in the US excluding foreign issues. ** Year-over-year percent change in quarterly using three-month averages.

Note: Shaded red areas denote S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: Federal Reserve Board.

Page 4 / October 12, 2023 / S&P 500 Dividend & Earnings Yield

Yardeni Research, Inc.



S&P 500 Earnings Yield

Figure 5.

20

20

REAL EARNINGS YIELDS

18

18

16

16

14

Real Earnings Yields

14

All Equities

12

Less Foreign** (0.7)

12

10

S&P 500* (0.6)

10

8

8

6

6

4

4

2

2

Q2

0

0

-2

-2

-4

-4



-6

-6

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

* After-tax corporate profits as reported to the IRS as a percent of market value of US equities traded in the US excluding foreign issues minus CPI inflation rate (y/y in quarterly using 3-ma). ** S&P 500 reported earnings as a percent of quarterly average S&P 500 index minus CPI inflation rate (y/y in quarterly using 3-ma). Q4-2008 dropped because of negative value. Note: Shaded red areas denote S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: Federal Reserve Board, Standard & Poor's, and Bureau of Labor Statistics.

Figure 6.

20

20

S&P 500 REPORTED EARNINGS YIELD*

(as a percent of quarterly average S&P 500 index, annual rate, nsa)

15

15

10

10

5

Q2

5

0 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15

* S&P 500 reported earnings as a percent of quarterly average S&P 500 index. Q4-2008 dropped because of negative value. Source: Standard & Poor's.

0

20 25 30

Page 5 / October 12, 2023 / S&P 500 Dividend & Earnings Yield

Yardeni Research, Inc.



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