8 Dividend Stocks Statistics that Every Investor Should Know

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Dividend stocks are securities that grant some level of ownership in a company with the intention of paying dividends in the form of cash or stock offerings.

Simply put, you’re getting a piece of the pie.

If you’re the type of person that has time and resources to grow money with this type of passive income, here are some of the most interesting statistics on dividend stocks for would-be investors.

1.) About 400 Companies In The S&P 500 Index Pay Dividends To Their Investors

The Standard and Poor’s 500 (a.k.a. the S&P 500) is a US index composed of over 500 publicly traded US companies. It provides an investment benchmark for the American stock market, being one of the most even-handed measures of national corporations.

Almost 80% of the companies in the S&P 500 index pay dividends to their shareholders.

2.) Less Than 40 Companies In The S&P 500 Have A Dividend Yield of 4%

Most companies in the S&P 500 index have a dividend yield between 1% and 2%. Although its historical average dividend yield is 4.3%.

3.) 65 Companies In The S&P 500 Are “Dividend Aristocrats”

Dividend Aristocrats are companies that have accumulated 25+ consecutive years of both dividend payouts and increases. To be a Dividend Aristocrat, a company must meet certain attributes.

Some of these are as follows:

  • They must belong to the S&P 500 index
  • They must have increased dividend payouts consistently for 25 years
  • They must maintain a total market cap of $3 billion USD

There are companies that outperform the so-called Dividend Aristocrats.

The Dividend Kings.

4.) 37 Out Of 65 Dividend Aristocrats Are Dividend Kings

Much of their incremental payment of dividends to investors has been consistent for 50+ years. That’s Half a Century! A feat so rare that Dividend Kings comprise of just 7% of the S&P 500 index.

5.) There Are 4 Dividend-Friendly Industries

There are sectors that stand out when it comes to paying dividends regularly. These would be the top four sources for dividend investors wanting a long-term and sustainable payout.

For anyone who wants a reliable return, these are the go-to sectors to get started.

  • Utilities – Regardless of what’s happening in the economy, people will always need to use electricity, heating and water.
  • REITs – These are stocks that represent shares of various companies that deal in real estate. They get consistent profits from the ongoing rent and long-term leases on the properties they own. These properties can be either residential, commercial or retail.
  • MLPs – Mostly operate as energy infrastructure companies, which means they typically have lower taxes. Regardless of the fuel price, they charge based on the volume of oil or gas that passes through their pipeline. That’s why they can give higher dividend payments.
  • Telecommunications – Next of kin to utilities, telecom services will always be a staple in peoples’ lives independent of any economic situation

6.) Top Dividend-Paying Companies Since The 1800s

Companies that have paid dividends for over 100 years are rare, but there are a few of them. The companies in the list below have been paying dividends for more than a century, and some can be found on the Dividend Aristocrats Index.

  • PPG Industries – Since 1899
  • General Mills – Since 1898
  • Colgate Palmolive – Since 1895
  • Stanley Black & Decker – Since 1895
  • Proctor and Gamble – Since 1890
  • Johnson Controls – Since 1887
  • Consolidated Edison – Since 1885
  • Eli Lilly – Since 1885
  • Exxon Mobil – Since 1882
  • York Water – Since 1815

7.) The 5 Infamous Dividend Stock Downfalls of All Time

Some companies reduce their dividend payouts when they are going through a difficult time. In some worst cases it could mean the total suspension of dividends due to bankruptcy. These companies are ex-major league dividend payers. When they suffered inward collapse, they brought down a lot of shareholders with them.

Photo Credits: Laura Northrup from Albany, NY, USA, CC BY 2.0 https://creativecommons.org/licenses/by/2.0, via Wikimedia Commons
  • General Motors – GM had failed to keep up with the times when they insisted on their own design instead of meeting their customers’ preference for fuel efficiency.
  • J.C. Penney – J.C. Penny probably lost its most loyal customers when they tried to change the store too much. Their customer base liked J.C. Penny for what it was, a good bargain with a lot of stocks from labels that are now sold out everywhere else.
  • Kodak – In the 1990s, when the appeal of the print photo industry began to wane, Kodak struggled to defend their old business model. In reality they had already been ahead in vision, talent and resources to create a new business model. All they had to do was remember what kind of business they were in, “a moment sharing company”.
  • RadioShack – RadioShack is just one of many brands that couldn’t keep up with changing consumer habits. It got stuck in brick-and-mortar locations with a weird mix of unsellable items while their DIY enthusiast customers shifted to Amazon and eBay.
  • Washington Mutual – Wa Mu is an example of a company that had high ambitions to become the ‘Wal-Mart’ of the banking industry but was instead America’s biggest bank failure. It was a pity that its investments were concentrated in Florida and California. States hardest hit when the housing market bubble collapsed in 2008.

8.) Dividend Payout Ratios Above 100% Are a Red Flag

There are a number of good indicators of high dividend stock. The dividend payout ratio is one among many. However, there is a major red flag with a company that has a payout ratio over 100%.

A company that pays out more in dividends than it earns is returning more money to shareholders than it generates in income. With a lower payout ratio, the dividend appears more sustainable.

Related Read: Dividend Stock Investing to Grow Your Passive Income Portfolio

Alvin Medalla
Alvin Medalla
Alvin is a WordPress wizard and an all-around website ninja. He is the content manager, research specialist, image expert, and statistics aficionado - here on the Dumb Passive Income blog.
Alvin Medalla
Alvin Medalla
Alvin is a WordPress wizard and an all-around website ninja. He is the content manager, research specialist, image expert, and statistics aficionado - here on the Dumb Passive Income blog.

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