LATEST ON THE INTERNET ARTICLE:
May 16, 2015
Dividends have historically been a cornerstone principle of value investing. However, companies of all shapes and sizes have implemented dividends into their shareholder return strategies. What is a dividend? Dividends can be issued as cash payments, as shares of stock or as other property, although for this article we are referring to cash dividends only. These cash payments are typically paid quarterly and represent a distribution of a portion of a company’s earnings.
The number of dividend-paying companies in the S&P 500 index increased 15% since 2009 (as of the end of April 2015 using Stock Investor Pro/Thomson Reuters data). Large-cap companies aren’t the only ones following this trend, either. Since 2009, the number of dividend-paying companies in the S&P MidCap 400 and S&P SmallCap 600 indexes increased by 23% and 33%, respectively.
Within the S&P 500, 84% of constituents currently pay a dividend. All 30 members of the Dow Jones industrial average pay a dividend.
With so many companies of such diverse types paying dividends, even investors who don’t necessarily focus on dividend policy as part of their strategy should stay updated on dividend plans and announcements. Whether dividends are currently part of your strategy or will prospectively become part of your strategy, you need solid go-to resources online where you can find valuable dividend information.
The founder of Validea Capital asset management firm describes their newest product, a robo-advisory service called Validea Legends Advisor.