Standard & Poor's Lowers S&P 500 Index's Expected 2008 Dividend

On Tuesday,  Standard & Poor's lowered the S&P 500 Index 2008 estimated dividend by 2.8% to $28.05 versus the prior estimate of $28.85. Although S&P lowered the expected dividend, it still remains above the dividend level recorded in 2007, i.e., $27.73. The indicated dividend rate for the S&P 500 Index has also been lowered to $27.35. S&P's Senior Index Analyst, Howard Silverblatt attributed the reduction to potentially negative government actions that might limit the dividend with additional cuts anticipated in 2009.

Most of the dividend cuts have been centered in the financial sector--35 in total; however, Howard Silverblatt noted that S&P:

...believes that the majority of S&P 500 companies will continue their long history of dividend payments and increases, with over half of them expected to pay out more this year than last.

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Source:

• S&P Decreases Expected 2008 Dividend Payment for the S&P 500 Index Q4 Payments Expected to Decline 10% - Worst Since 1958 (pdf file), Standard & Poor's, By: Howard Silverblat & David Guarino, October 21, 2008.
   

Comments

[Shiv Kapoor:]

Interesting; if dividends come in at $28, at 31X dividend, 870 odd is a possible bottom for the market in 09. FYI the lowest dividend multiple the SP500 has ever traded at over the past 20 years is 31.

2008 Oct 22 11:03 AM