The Dow Jones Industrial Average’s 30 component companies said they expect to pump up their annual dividend payouts by 12.3% in 2012 to almost $105 billion.
The expected annual dividend distribution as of the end of 2011’s fourth quarter will rise by 1.94% from the previous quarter, according to a survey conducted by Dow Jones Indexes.
“As is the case with most information gleaned from Dow Jones Industrial Average’s component companies, this dividend data provides meaningful insight into the strategic outlook of bellwether U.S. corporations,” David Krein, senior director of product development and analytics at Dow Jones Indexes, said in a statement.
DJI components’ dividends will account for 38% of total U.S. stock dividend payouts in 2012.
In the third and fourth quarters, DJIA component companies paid $102.7 billion and $93.2 billion, respectively, in indicated annual dividends (IAD).
Nine of the 10 largest dividend distributions in the U.S. market – by total estimated payout – are DJIA component companies: AT&T, $10.5 billion IAD, or $1.76 per share; Exxon Mobil, $9.1 billion, $1.88; General Electric, $7.2 billion, $0.68; Chevron, $6.5 billion, $3.24; Johnson & Johnson, $6.2 billion, $2.28; Pfizer, $6.2 billion, $0.80; Microsoft, $6.0 billion, $0.80; Procter & Gamble, $5.8 billion, $2.10; and Verizon, $5.7 billion, $2.00.
Annually, AT&T, Exxon Mobil and General Electric – the top three payers – would account for 9.57% of all dividends paid by stocks included in the Dow Jones U.S. Index.
Since the end of 2011’s third quarter, eight DJIA companies have increased their per-share dividends: Disney, by 50%; Home Depot, 16%; McDonalds, 14.75%; General Electric, 13.33%; Merck, 10.53%; Boeing, 4.76%; Chevron, 3.85%; and AT&T, 2.33%.
“One of the market’s subtle truisms is that many investors track the DJIA for more than just its day-to-day pricing figures,” Krein added. “As we can see with the dividend information, there is much to be learned about the broad U.S. market by mining The Dow’s component companies’ data for useful indications that enable investors to make informed decisions about their investment portfolios.”
Compared with the Dow Jones U.S. Index, Dow component companies’ dividend yield (IAD divided by market capitalization) was higher by 61 basis points, or 2.71% vs. 2.10%. The DJIA companies’ five-year, weighted average-dividend-growth rate was 15.04%, compared with the Dow Jones U.S. Index’s 25.13%.