Dividend Quarterly

Andrew Birstingl, Research Analyst
abirstingl@factset.com
DIVIDEND QUARTERLY
Media Questions/Requests
media_request@factset.com
September 22, 2016
S&P 500
Key Metrics:
 Aggregate Quarterly Dividends Increase 0.8%: Aggregate quarterly dividends for the S&P 500 amounted to
$105.8 billion in the second quarter (May-July), which represented a 0.8% increase year-over-year. The
dividend total in Q2 marked the second largest quarterly dividend amount in at least ten years (after Q1 2016).
 Dividends per Share Climb to New High, but Growth Still in Single Digits: Dividends per share amounted to
$44.23 for the trailing twelve months ending in Q2, which marked the largest aggregate DPS in at least ten
years. This represented a 6.1% year-over-year growth rate. The second quarter marked the third consecutive
quarter in which TTM DPS grew at a single-digit rate.
 Payout Ratio Rises to 39.5%: The S&P 500 TTM payout ratio was 39.5% at the end of Q2, which was an 8.9%
increase year-over-year. This marked the index’s largest dividend payout ratio since Q3 2009.
 42 Companies with Payout Ratios Exceeding 100%: In the TTM ending in Q2, 42 companies in the S&P 500
had payout ratios exceeding 100%, which was the third highest number in at least ten years.
 Dividend Aristocrats on the Decline since End of June: After outperforming the S&P 500 index by 7.6
percentage points this year through the end of June, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
has since underperformed the benchmark by 3.1 percentage points.
Dividend Quarterly is one part of three reports (Buyback Quarterly and Cash & Investments Quarterly) analyzing cash
and spending within the S&P 500.
To receive this report via e-mail, please go to: www.factset.com/data/news_research/researchdesk
To view other market stories with FactSet content, please go to: www.factset.com/insight
All data published in this report is available on FactSet. Please contact media_request@factset.com or 1-877-FACTSET for more
information.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
1
DIVIDEND QUARTERLY
September 22, 2016
Q2 Dividends Increase YOY to Second Largest Quarterly Total
Aggregate Dividend Payments Increase 0.8% Year-Over-Year
Aggregate quarterly dividends for the S&P 500 amounted to $105.8 billion in the second quarter, which represented a
0.8% increase year-over-year. The dividend total in Q2 marked the second largest quarterly dividend amount in at
least ten years (after Q1 2016). The total dividend payout for the trailing twelve months ending in Q2 amounted to
$427.5 billion, which was a 7.1% increase from the same time period a year ago. The payout was the largest TTM
total in at least ten years. The second quarter also marked the tenth consecutive quarter that the trailing twelvemonth dividend payout for the S&P 500 index hit a new high. The number of dividend payers in the S&P 500 at the
end of Q2 was 419 companies. This was a slight decrease from the 420 companies paying dividends in the trailing
twelve-month period a year ago.
At the sector level, the Information Technology and Consumer Staples sectors led all groups in terms of aggregate
dividends paid during the quarter. The Information Technology sector ended Q2 with dividend payments totaling
$16.4 billion on a quarterly basis and $64.7 billion on a TTM basis. Apple, Microsoft, and IBM were the top spenders
in the sector over the trailing twelve months. The Consumer Staples sector paid out $14.3 billion in dividends for the
quarter and $56 billion for the TTM period ending in Q2. The dividend distributions over the trailing twelve months
represented the largest payout for the Consumer Staples sector in at least ten years. Procter & Gamble, Philip
Morris, and Wal-Mart were the top spenders on dividends in the sector. Regardless of sector, Exxon Mobil paid out
the largest dividend amount in the trailing twelve-month period of any S&P 500 company. The full top ten list is
shown on page eight of this report.
Q2 Shareholder Distributions Mark Smallest Quarterly Total since Q4 2014
Shareholder distributions, defined as total dividends plus gross share buybacks, amounted to $230.9 billion at the
end of the second quarter, which was a 3.5% year-over-year decline. The Q2 amount represented the smallest
quarterly total of shareholder distributions since Q4 2014. The low level of distributions was primarily driven by the
sharp decline in share buybacks during the second quarter. (Additional analysis on buybacks can be found in the
FactSet Buyback Quarterly report). This was a stark contrast to the first quarter, when buybacks were not far off
record levels and shareholder distributions reached its largest total in at least ten years. During the second quarter,
dividend payments made up 46% of shareholder distributions, while gross share buybacks made up the other 54%.
Apple and General Electric spent more on shareholder distributions in Q2 than any other company in the S&P 500
($14.1 billion and $9.9 billion, respectively). The full top ten list is shown on page five of this report.
Dividends per Share Grow at Single-Digit Growth Rate for Third Consecutive Quarter
Dividends per share for the S&P 500 amounted to $44.23 for the trailing twelve months ending in Q2, which marked
the largest aggregate DPS in at least ten years. This amount represented an 11.4% premium to the average
dividends per share total over the past three years. Aggregate DPS for the S&P 500 has continued to increase, but it
has done so at a decreasing rate. The year-over-year growth rate in the second quarter was 6.1%, which was wellbelow the three-year average growth rate for the index (10.8%). The second quarter also marked the third
consecutive quarter in which TTM dividends per share grew at a single-digit clip.
At the sector level, the Telecom, Health Care, and Financials groups grew their aggregate dividends per share at
double-digit rates. The Telecom and Health Care sectors led all groups in terms of DPS growth, posting year-overyear growth rates of 11.2% and 10.3%, respectively. The Energy and Materials sectors were the only groups that
saw their TTM dividends per share decline compared to the year-ago period.
Analysts Expect DPS Growth to Slow to 4.7% over Next Twelve Months
Over the next twelve months, dividend per share growth for the S&P 500 is expected to slow to 4.7%. This rate
slightly trails the 4.9% growth rate that was expected a quarter ago. This slowing growth has been an ongoing trend
in the S&P 500 for over a year. Analysts are projecting that six of the GICS sectors will see slower DPS growth over
the next twelve months relative to the trailing twelve-month period ending in Q2. The Materials, Energy, Industrials,
and Financials sectors are the only groups forecasted to experience accelerated dividend growth. On an absolute
basis, the Financials and Health Care sectors are expected to lead all sectors in dividend growth moving forward.
Analysts estimate the Financials sector will maintain a double-digit growth rate and increase DPS by 10.2% over the
next twelve months, while the Health Care sector is expected to grow dividends per share by 7.2%. The estimated
NTM DPS growth for the Financials sector is essentially in line with the growth experienced in the TTM period. For
the Health Care sector, the estimated DPS represents a 3.1 percentage point slowdown in growth compared to the
growth logged in the TTM period.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
2
DIVIDEND QUARTERLY
September 22, 2016
S&P 500 Dividend Payout Ratio Rises to 39.5%
The S&P 500 TTM dividend payout ratio was 39.5% at the end of Q2, which was an 8.9% increase year-over-year,
and a 1.1% increase from a quarter ago. The ratio represented a 25% premium to the median payout ratio going
back five years. It also marked the index’s largest dividend payout ratio since Q3 2009. The S&P 500 payout ratio
has continued to rise even as aggregate dividends per share and earnings per share have moved in opposite
directions. Trailing twelve-month DPS grew at a 6.1% clip in the second quarter, while earnings per share saw its
fifth consecutive quarter of year-over-year earnings declines in Q2. This dynamic has helped prop up the aggregate
payout ratio for the S&P 500 index. With earnings growth not expected to return until the fourth quarter, it will be
interesting to see if this trend can continue.
At the sector level, eight of the GICS sectors saw their payout ratios exceed their five-year median ratios (Financials
and Telecom were the exceptions). Aside from the Energy group, the Materials and Consumer Discretionary sectors
had the largest premiums to their five-year median ratios. The trailing twelve-month payout ratio ending in Q2 for the
Materials group represented a 19.1% premium to its five-year median ratio, while the ratio for the Consumer
Discretionary group represented an 11.3% premium to its five-year median.
42 Companies with Payout Ratios Exceeding 100%
In the trailing twelve months ending in Q2, 42 companies in the S&P 500 had payout ratios exceeding 100%, which
was the third highest number in at least ten years. This number excludes firms with negative earnings per share and
firms that do not pay out a dividend. Of the 42 companies, 20 companies came from the newly formed Real Estate
sector, 4 from the Energy sector, and 3 each from the Materials and Information Technology sectors.
Shareholder Distributions Make Up 123% of Earnings
In addition to looking at dividends as a percentage of earnings, it is also interesting to analyze total shareholder
distributions, which includes gross share buybacks and dividends. For the trailing twelve months ending in the
second quarter, shareholder distributions made up 123% of aggregate earnings for the S&P 500, which was the
largest post-recession ratio aside from Q1 2016. Shareholder distributions have exceeded earnings on a TTM basis
since Q2 2015.
Dividend Yield at 2.07%; Total Shareholder Yield at 5%
The trailing twelve-month dividend yield for the S&P 500 index at the end of Q2 was 2.07%, which represented a
2.5% decrease from the same time period a year ago. The yield is still above the the U.S. 10-Yr Treasury yield,
which stands at around 1.65%. The S&P 500 dividend yield has been above the govermment yield for much of this
year, which has attracted some investors to certain dividend paying stocks.
At the sector level, the Energy and Consumer Staples groups had the largest aggregate dividend yields (3.08% and
2.59%, respectively) after the Telecom and Utiltiies sectors. Within the Energy sector, Valero and Transocean
provided the highest TTM dividend yields (4.13% and 3.28%, respectively). Within the Consumer Staples sector,
Philip Morris and Altria Group provded the highest TTM dividend yields (4.05% and 3.56%, respectively). Regardless
of sector, the S&P 500 companies with the highest yields over the trailing twelve months were Ford and Host Hotels
& Resorts (5% and 4.99%, respectively). The full top ten list is shown on page nine of this report.
The total shareholder yield for the S&P 500 (calculated as TTM gross buybacks plus TTM dividends divided by
market capitalization) at the end of the second quarter was 5%, which represented a 1.1% increase from the same
time period a year ago. The ratio stands at a 1.1% premium to the average total shareholder yield over the past three
years. Compared to the trailing twelve-month period ending in Q1, both the dividend yield and the buyback yield for
Q2 were lower, which helped push the total shareholder yield down 4.8%.
FactSet Screen: Healthy Yield with Increasing EPS
In an effort to find alternative stocks that provide healthy dividend yields, FactSet screened on companies in the S&P
500 with a dividend yield greater than 2%, payout ratio less than 100%, positive TTM earnings per share, and three
consecutive years of increasing earnings per share. Of the 45 companies passing the screen, LyondellBasell
Industries, People’s United Financial, Valero Energy, Altria Group, and Emerson Electric were the top five ranked by
indicated annual dividend yield. The top ten list is shown on page 13 of this report.
Activist Campaigns Agitating for Buybacks/Dividends at Companies
On a year-to-date basis, there were 34 activist campaigns in which a dissident objective was to return cash via
dividends and/or buybacks. Of these 34 activist campaigns YTD, the activists were successful in eight of the
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
3
DIVIDEND QUARTERLY
September 22, 2016
campaigns. This trails the pace seen in 2015 over the same time frame, when activists launched 48 of these types of
campaigns, with 27 resulting in success. Keep in mind that 2015 was a record setting year in terms of activist
campaigns of this kind as well as total activist campaigns announced as a whole. Looking back to the same year-todate period in 2014, there were 27 activist campaigns in which a dissident objective was to return cash via dividends
and/or buybacks. Of these 27 activist campaigns YTD, the activists were successful in eleven of the campaigns.
Examples of success include: the company declaring a special one-time dividend, increasing its regular dividend,
announcing a new share repurchase program, and expanding its existing share repurchase program.
Dividend Aristocrats on the Decline since the End of June
As the search for yield continued in this low interest rate environment, Dividend Aristocrats and companies in the
Utilities and Telecom sectors were some of the favorites among investors. On a year-to-date basis through the end
of June, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) had increased over 10%, while the S&P 500
Utilities and Telecom sectors were each up over 21%. Over the same time period, the S&P 500 index increased less
than 3%. However, since the end of June, these dividend paying stocks were on the decline. The NOBL has
underperformed the S&P 500 index by 3.1 percentage points from the end of June through Tuesday’s close, while
Utilities and Telecom sectors underperformed the index by 7.3 percentage points and 9.8 percentage points,
respectively. Despite this recent decline, they are still outperforming the benchmark on a year-to-date basis as
shown on page 17 of this report.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
4
DIVIDEND QUARTERLY
September 22, 2016
Shareholder Distributions
Quarterly data in this report is organized by adjusted calendar quarters with Q2 ending in July. (Q1:April, Q2:July,
Q3:Oct, Q4:Jan)
Top 10 Companies by Quarterly Shareholder Distributions
ID
AAPL
GE
MSFT
JNJ
WFC
ABBV
MCD
WMT
T
XOM
FactSet.com
Company
Apple Inc.
General Electric Company
Microsoft Corporation
Johnson & Johnson
Wells Fargo & Company
AbbVie, Inc.
McDonald's Corporation
Wal-Mart Stores, Inc.
AT&T Inc.
Exxon Mobil Corporation
Sector
Information Technology
Industrials
Information Technology
Health Care
Financials
Health Care
Consumer Discretionary
Consumer Staples
Telecom
Energy
Qtr
Qtr
Shareholder 1 Yr Total
Dividends Qtr Buybacks Distributions
Return
$3,187
$10,900
$14,087
2.2%
$2,274
$7,588
$9,862
23.3%
$2,821
$3,600
$6,421
34.3%
$2,197
$2,368
$4,565
29.9%
$2,259
$2,214
$4,473
(6.0%)
$927
$3,421
$4,348
7.5%
$759
$3,289
$4,048
23.7%
$1,560
$2,049
$3,609
17.1%
$2,952
$224
$3,176
29.3%
$3,133
$0
$3,133
17.6%
Source: FactSet
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
5
DIVIDEND QUARTERLY
September 22, 2016
Shareholder Distributions (continued)
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
6
DIVIDEND QUARTERLY
September 22, 2016
Dividend Payout Practices
The top chart counts the number of companies with trailing twelve-month dividend payments that are above, below,
or in-line with payments from the previous quarter. “Non-payers” are stocks that did not pay dividends in the trailing
twelve months or the previous quarter’s trailing twelve months.
Increases and decreases in dividends per share are assessed on how the month-end trailing twelve-month DPS
figure compares to the previous quarter’s value.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
7
DIVIDEND QUARTERLY
September 22, 2016
Dividends Paid
Aggregate cash dividends paid is sourced directly from the cash flow statement and includes both common and
preferred dividends. The information presented below shows cash dividends paid over the trailing twelve months.
Top 10 Companies by Dividends Paid (TTM Basis)
ID
XOM
AAPL
T
MSFT
GE
WFC
VZ
JNJ
JPM
CVX
FactSet.com
Company
Sector
Exxon Mobil Corporation
Apple Inc.
AT&T Inc.
Microsoft Corporation
General Electric Company
Wells Fargo & Company
Verizon Communications Inc.
Johnson & Johnson
JPMorgan Chase & Co.
Chevron Corporation
Energy
Information Technology
Telecom
Information Technology
Industrials
Financials
Telecom
Health Care
Financials
Energy
Divs Paid
(TTM)
$12,301
$12,022
$11,226
$11,006
$9,169
$8,983
$8,877
$8,414
$8,259
$8,000
Payout
Ratio (TTM)
117.5%
25.5%
82.5%
68.6%
67.4%
37.0%
63.8%
58.3%
30.5%
-
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
1 Yr Price
Return
1 Yr Total
Return
13.6%
0.1%
22.8%
30.7%
19.6%
(8.8%)
15.0%
26.3%
9.1%
25.7%
Source:
17.6%
2.2%
29.3%
34.3%
23.3%
(6.0%)
20.4%
29.9%
12.3%
31.5%
FactSet
8
DIVIDEND QUARTERLY
September 22, 2016
Dividend Yield: Sector-Level
Dividend yield is calculated by dividing the trailing twelve-month dividends per share figure by yesterday’s closing
price. Ten-year average figures compute the average based on the dividend yield at the quarter-end. The newly
formed Real Estate sector is not included in this report. See the “Report Notes” section at the end of this report for
more details.
Top 10 Companies by Dividend Yield (TTM)
ID
F
HST
T
GM
NAVI
VIAB
VZ
MOS
PPL
KSS
Company
Sector
Ford Motor Company
Host Hotels & Resorts, Inc.
AT&T Inc.
General Motors Company
Navient Corp
Viacom Inc. Class B
Verizon Communications Inc.
Mosaic Company
PPL Corporation
Kohl's Corporation
Consumer Discretionary
Real Estate
Telecom
Consumer Discretionary
Financials
Consumer Discretionary
Telecom
Materials
Utilities
Consumer Discretionary
Div Yld
(TTM)
DPS (TTM)
5.00%
4.99%
4.78%
4.68%
4.64%
4.42%
4.41%
4.38%
4.36%
4.35%
$0.60
$0.80
$1.91
$1.48
$0.64
$1.60
$2.26
$1.10
$1.52
$1.90
Payout Ratio
(TTM)
1 Yr Total
Return
26.7%
76.9%
82.5%
19.0%
27.5%
30.8%
63.8%
69.2%
58.5%
61.9%
Source:
(10.3%)
2.0%
29.3%
8.7%
14.6%
(18.5%)
20.4%
(29.4%)
17.2%
(7.2%)
FactSet
*Screen results exclude companies with dividend payout ratios >100% or less than 0% for the trailing twelve-month period.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
9
DIVIDEND QUARTERLY
September 22, 2016
Dividend Payout Ratio:
There are a number of periods where earnings volatility caused payout ratios to change dramatically. For this reason,
the sector chart examines median payout ratios. The newly formed Real Estate sector is not included in this report.
See the “Report Notes” section at the end of this report for more details.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
10
DIVIDEND QUARTERLY
September 22, 2016
Dividend Growth: One-Year
Top 10 Companies by Growth in TTM Dividends per Share - 1 Year*
ID
VLO
WRK
PGR
EXR
AMGN
IPG
LB
CCL
CCI
MPC
Company
Sector
Valero Energy Corporation
Energy
WestRock Co.
Materials
Progressive Corporation
Financials
Extra Space Storage Inc.
Financials
Amgen Inc.
Health Care
Interpublic Group of Companies, Inc.
Consumer Discretionary
L Brands, Inc.
Consumer Discretionary
Carnival Corporation
Consumer Discretionary
Crown Castle International Corp Financials
Marathon Petroleum Corporation Energy
1Yr DPS
Growth
1Yr EPS
Growth
55.9%
40.1%
29.4%
27.5%
27.2%
25.3%
25.0%
23.8%
23.7%
23.4%
(29.3%)
(119.4%)
(20.0%)
10.1%
29.5%
(2.1%)
6.2%
62.9%
(33.9%)
(37.0%)
1 Yr Total
Return
Div Yld
(TTM)
(3.7%)
4.1%
(2.4%)
3.2%
4.3%
2.9%
5.8%
3.3%
18.0%
2.2%
14.5%
2.5%
(17.1%)
3.2%
(8.9%)
2.8%
23.1%
3.8%
(4.5%)
3.1%
Source: FactSet
*This screen excludes companies with a starting or current dividend yield of less than 2%. The growth rate
methodology is based on trailing twelve-month DPS compared to the value one year ago.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
11
DIVIDEND QUARTERLY
September 22, 2016
Next Twelve Month DPS Estimates
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
12
DIVIDEND QUARTERLY
September 22, 2016
Dividend Screens
The following lists of companies were generated using FactSet’s Universal Screening tool. The universe is the
current constituents of the S&P 500 index. The parameters of each screen are listed below.
Screen: S&P 500 companies with 25 consecutive years of increasing dividends per share. Of these companies
passing the screen, the top 10 companies ranked by dividend yield are shown below.
Top 10 Div Yield (Indicated) of Companies with 25 Consecutive Years of Increasing Dividends
ID
CVX
XOM
ED
TGT
KO
TROW
MCD
PG
KMB
PEP
Company
Chevron Corporation
Exxon Mobil Corporation
Consolidated Edison, Inc.
Target Corporation
Coca-Cola Company
T. Rowe Price Group
McDonald's Corporation
Procter & Gamble Company
Kimberly-Clark Corporation
PepsiCo, Inc.
Sector
Energy
Energy
Utilities
Consumer Discretionary
Consumer Staples
Financials
Consumer Discretionary
Consumer Staples
Consumer Staples
Consumer Staples
Div Yld
(Indicated)
4.38%
3.63%
3.50%
3.50%
3.31%
3.24%
3.06%
3.02%
2.98%
2.83%
Indicated
Annual
Payout Ratio 1 Yr Total
Dividend
(TTM)
Return
$4.28
31.5%
$3.00
117.5%
17.6%
$2.68
68.7%
22.2%
$2.40
42.2%
(7.6%)
$1.40
78.2%
12.1%
$2.16
51.2%
(1.3%)
$3.56
68.6%
23.7%
$2.68
75.2%
31.0%
$3.68
66.9%
17.8%
$3.01
82.0%
17.5%
Source: FactSet
Screen: S&P 500 companies with a dividend yield greater than 2%, payout ratio less than 100%, positive TTM
earnings per share, and three consecutive years of increasing earnings per share. Of these companies passing the
screen, the top 10 companies ranked by dividend yield are shown below.
Top 10 Div Yield (Indicated) of Companies Passing FactSet Universal Screen
ID
LYB
PBCT
VLO
MO
EMR
AEP
BA
AEE
WFC
PFG
FactSet.com
Company
LyondellBasell Industries NV
People's United Financial, Inc.
Valero Energy Corporation
Altria Group, Inc.
Emerson Electric Co.
American Electric Power Company,
Boeing Company
Ameren Corporation
Wells Fargo & Company
Principal Financial Group, Inc.
Sector
Materials
Financials
Energy
Consumer Staples
Industrials
Inc.
Utilities
Industrials
Utilities
Financials
Financials
Div Yld
(Indicated)
4.35%
4.33%
4.31%
3.84%
3.67%
3.38%
3.34%
3.32%
3.32%
3.30%
Indicated
Annual
Payout Ratio 1 Yr Total
Dividend
(TTM)
Return
$3.40
35.2%
(5.8%)
$0.68
75.0%
7.6%
$2.40
37.2%
(3.7%)
$2.44
78.5%
20.9%
$1.90
67.4%
17.9%
$2.24
63.3%
21.5%
$4.36
76.9%
(3.1%)
$1.70
65.6%
28.6%
$1.52
37.0%
(6.0%)
$1.64
37.0%
5.6%
Source: FactSet
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
13
DIVIDEND QUARTERLY
September 22, 2016
Shareholder Activism
Number of Activist Campaigns Agitating for Shareholder Distributions
(Source: FactSet)
80
70
60
50
40
30
20
10
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
# of campaigns with activist demanding return of cash via dividends/buybacks
# of successful campaigns with activist demanding return of cash via dividends/buybacks
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
14
DIVIDEND QUARTERLY
September 22, 2016
Indexed Price Performance: NOBL vs SPYB vs S&P 500
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
15
DIVIDEND QUARTERLY
September 22, 2016
Indexed Price Performance: NOBL and High Yield Sectors vs S&P 500
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
16
DIVIDEND QUARTERLY
September 22, 2016
20-Year Forward Performance: Dividend Practices
The following charts show cumulative, forward one-month returns based on previous month characteristics, or
factors, from a rolling universe of S&P 500 constituents. For all back tests, securities are regrouped dynamically and
shown market-cap weighted to ensure that the effects of differences in security weighting between the model and
the benchmark have a limited impact on return comparisons.
For this back test, S&P 500 companies were broken into quintiles by dividend payout ratio (TTM basis). The groups
were formed after removing non-dividend paying companies and companies with negative earnings from the
universe. Quintile 1 includes the group of companies with the highest payout ratios and Quintile 5 includes the group
of companies with the lowest payout ratios.
For this back test, S&P 500 companies were broken into groups by change in their TTM DPS relative to 3 months
ago. The groups were formed after removing non-dividend paying companies from the universe.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
17
DIVIDEND QUARTERLY
September 22, 2016
Report Notes:
Aggregate sector-level financial metrics for the newly formed S&P 500 Real Estate Sector are not yet available in the
FactSet Market Aggregates database, and are therefore excluded from this report. This data will be available in the
December edition of FactSet Dividend Quarterly.
Aggregate sector-level financial metrics for the S&P 500 Financials sector has been updated in the FactSet Market
Aggregates database to reflect the removal of the Real Estate Industry group, and are included in this report.
Important Notice
The information contained in this report is provided “as is” and all representations, warranties, terms and conditions, oral or written,
express or implied (by common law, statute or otherwise), in relation to the information are hereby excluded and disclaimed to the
fullest extent permitted by law. In particular, FactSet, its affiliates and its suppliers disclaim implied warranties of merchantability and
fitness for a particular purpose and make no warranty of accuracy, completeness or reliability of the information. This report is for
informational purposes and does not constitute a solicitation or an offer to buy or sell any securities mentioned within it. The
information in this report is not investment advice. FactSet, its affiliates and its suppliers assume no liability for any consequence
relating directly or indirectly to any action or inaction taken based on the information contained in this report.
About FactSet
FactSet is a leading provider of integrated financial information and analytical applications. More than 63,000 users stay ahead of
global market trends, access extensive company and industry intelligence, and monitor performance with FactSet’s desktop
analytics, mobile applications, and comprehensive data feeds. The Company has been included in FORTUNE's Top 100 Best
Companies to Work For, the United Kingdom’s Great Places to Work and France’s Best Workplaces. FactSet is listed on the
New York Stock Exchange and NASDAQ (NYSE:FDS) (NASDAQ:FDS). Learn more at www.factset.com, and follow us on
Twitter: www.twitter.com/factset.
About FactSet Fundamentals
FactSet Fundamentals gives you access to current, comprehensive, and comparative information on securities worldwide. The
comprehensive coverage available includes more than 69,000 companies from over 70 countries, with 20 years of historical data,
and up to 2,000 data items on each company record. Comprised of annual and interim/quarterly data, detailed historical financial
statement content, per share data, calculated ratios, pricing, and textual information, FactSet Fundamentals provides you with the
information you need for a global investment perspective.
About FactSet Market Aggregates
FactSet Market Aggregates (FMA) combines information from FactSet Fundamentals, FactSet Estimates, and FactSet Prices to
derive ratios and per share values on an aggregate level. The in-depth, aggregate data lets you analyze markets and portfolios with
the same level of detail you use for security analysis. FMA gives you access to over 50 metrics for over 3,500 benchmarks including
S&P, Russell, MSCI Global, FTSE, STOXX, TOPIX, and many local exchanges.
About FactSet Alpha Testing
Alpha Testing is FactSet’s back testing tool. Alpha Testing lets you test ideas about which quantitative and qualitative factors drive
returns. Use our robust and flexible interface to create custom models and communicate results. Alpha Testing is fully integrated
into the FactSet workstation. Model scores can be used in real time portfolio contribution or for portfolio construction.
FactSet.com
Copyright © 2016 FactSet Research Systems Inc. All rights reserved.
18