Tag Archives: dividends

Dividends and Buybacks: S&P 500® Buyback Index Outperforms

In general, it is a positive sign when a company buy back shares. This means the company believes its stock is undervalued and is confident about its future earnings. In recent years, buybacks have become increasingly popular. With a record number of companies buying back shares, how are these companies are faring? A company can Read more […]

Using the S&P/JPX Dividend Aristocrats® to Invest in Japanese Dividend Growers

While some dividend-paying companies give out occasional and unsustainable dividends, dividend-growing companies—such as household names like Coca-Cola, Exxon Mobile, and AT&T in the U.S.—provide steadily increasing dividend payouts every year. These long-standing dividend growers are called “Dividend Aristocrats,” and there are two reasons for it. First, with successful business operations and disciplined financial management, they Read more […]

S&P 500® Dividend Aristocrats®: Risk Decomposition and Sector Composition

Today we examine the impact of the members of the S&P 500 Dividend Aristocrats Class of 2019 on the index’s factor risk and sector composition. In our previous blog, we introduced these new constituents and discussed their quality ranking. Risk decomposition of the S&P 500 Dividend Aristocrats using Axioma’s US Fundamental Equity Risk Model MH4 Read more […]

New Additions to the S&P 500® Dividend Aristocrats® Class of 2019

The December 2018 rebalance of the S&P 500 Dividend Aristocrats added four new companies, with the changes effective at the open of Feb. 1, 2019. The new firms are Caterpillar Inc., Chubb Limited, People’s United Financial Inc., and United Technologies Corp. These four companies have the distinguishing characteristics that allow them to be eligible for Read more […]

Combining the Quality Factor With Dividend Yield: A Study of S&P DJI Dividend Strategies

As of Dec. 31, 2018, the passive implementation of dividend strategies measured approximately USD 141 billion based on assets under management (AUM) of dividend-focused ETFs listed in the U.S. This is a staggering amount considering that only 10 years ago the AUM amounted to just over USD 6 billion.[1] The growth in assets, as well Read more […]

Dividend Growth Strategies and Downside Protection

2018 ended on a sour note for the S&P 500®, as the index declined by more than 9% in December alone. The drop-off resulted in the first negative calendar year return (-4.38%) for the S&P 500 (TR) since the financial crisis (2008). Meanwhile, the S&P 500 Dividend Aristocrats®, which is designed to measure the performance Read more […]

Using Trailing Dividend Yield Versus Indicated Dividend Yield

Over the past decade, the combination of low interest rate environments and shifting demographics has made income-focused investment strategies extremely popular. In constructing an income-producing equity index, the dividend yield of a security serves as a key criteria for eligibility and security selection. Dividend yield is usually calculated as a percentage of a stock’s annual Read more […]

Do Dividends Really Pay? (Part 2)

Previously I discussed why preference for dividend-paying stocks may not have a strong theoretical footing, but could be grounded in behavioral and practical reasons. Furthermore, due to possible economic signaling generated by dividends, such strategies may be correlated with widely accepted factors like quality and value. This post demonstrates how specific dividend strategy indices may Read more […]

Do Dividends Really Pay?

What benefits do dividend payments and dividend yields convey? The answers may sometimes be overlooked as market participants seek equity income or the perceived safety of dividend strategies. In 1961, Merton Miller and Franco Modigliani (M&M) theorized that dividend policy is irrelevant to company value.[1] Of course theories are models of reality and require simplifying Read more […]

Evaluating Various Financial Ratios Used in Dividend Analysis

There are many ratios that are used to assess the strength of dividends. In this blog, we explore the commonly used dividend measures in income analysis and their applications. We also introduce cash-flow-based measurements, such as free cash flow yield, that can be combined with traditional dividend measurements to provide additional insight into the quality Read more […]