August 1, 2022

In a reassuring sign to investors during a rocky second quarter, dividend payouts have hit another record, paying $140.6 Billion to stockholders. This is up from the beginning of the year, and nearly $20 billion higher than dividends paid at this time last year.

Dividends paid to stockholders have hit record highs in all but one of the past ten years, the exception being 2020. However, it is a positive sign for investors that despite the decline is stock prices in this year, dividends have still consistently increased. Companies want to show investors that they are in good health, and signal confidence by maintaining and growing their dividends despite a challenging economic environment.

Overall, dividend stocks have seen somewhat of a resurgence in 2022, as some investors see the regular stream of cash flow as a method to weather the economic turmoil. The S&P 500 dividend index, 80 high-yield companies in the S&P 500, has seen a smaller decline than the overall market, down 4.7% compared to the broader S&P’s 20% drop.

This recent trend of dividend stocks outperforming the broader market highlights an overall trend. For the past decade, large growth-oriented technology stocks led the indexes. But with rising rates and high inflation, investors are increasingly seeking more stability, and industries like consumer staples, utilities, and telecommunications tend to also pay a portion of their profits to shareholders.

Contact me to learn more about what investment strategies may be appropriate for you.