Yesterday, we discussed how the results of the recent stress tests allowed several major American banks to raise their dividends. Now, Standard & Poor's has found that this activity has pushed the dividends to record highs. According to S&P, announced dividends suggest a payout rate of $29.02 per index share.
That's a record for that figure. The highest number previously recorded was $28.96 in June 2008, just before the market crash. It bottomed out little more than a year later, in August 2009, when the dividend level reached $21.44. The biggest issue with that drop were the financials, which accounted for 30 percent of all of the S&P 500's dividends as recently as 2007. They now contribute just 13 percent.
On the other hand, while the raw number is at a peak, the percentage is far from it. The average company in the S&P 500 is now paying out just 30 percent of its profits as dividends, while the historical average is 52 percent.
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