Dow Jones IA component companies Increase expected dividend distribution

The Dow Jones Industrial Average‘s 30 component companies are expected to increase their annual dividend payout by 11.79% year-over-year and 1.12% from the previous quarter, according to a third-quarter 2011 survey by Dow Jones Indexes.

DJIA component companies’ $102.7 billion expected distribution for the 12 months beginning October 1, 2011, represents 38% of all indicated annual dividends (IAD) by American companies as measured by the Dow Jones U.S. Index, a gauge that accounts for roughly 95% of the U.S. equity market. (IAD is a forward-looking measure defined as a company’s most recently paid quarterly dividend multiplied by four.)

For the quarters ended June 30, 2011 and September 30, 2010, DJIA component companies paid $101.6 billion and $91.9 billion in IAD, respectively.

“As is the case with most information gleaned from Dow Jones Industrial Average’s component companies, this dividend data provides meaningful insight into the strategic outlook of bellwether U.S. corporations,” said David Krein, Senior Director, Product Development and Analytics, at Dow Jones Indexes. 

Nine of the ten largest dividend distributions in the U.S. market – by total estimated payout – are DJIA component companies: AT&T (NYSE: T): $10.2 billion IAD, or $1.72 per share; Exxon Mobil (NYSE: XOM): $9.1 billion, $1.88; General Electric (NYSE: GE): $6.4 billion, $0.60; Chevron (NYSE: CVX): $6.3 billion, $3.12; Pfizer (NYSE: PFE): $6.2 billion, $0.80; Johnson & Johnson (NYSE: JNJ): $6.2 billion, $2.28; Microsoft (NASDAQ: MSFT): $6.0 billion, $0.80; Procter & Gamble (NYSE: PG): $5.8 billion, $2.10; and Verizon (NYSE: VZ): $5.7 billion, $2.00.

Annually, AT&T, Exxon Mobil and General Electric – the top three payers – would account for 9.46% of all dividends paid by the stocks included in the Dow Jones U.S. Index.

Since the end of 2011’s second quarter, three DJIA companies have increased their per-share dividends: Microsoft 25.00%, Intel (NASDAQ: INTC) 15.89%, and Verizon 2.56%.

Compared with the Dow Jones U.S. Index, Dow component companies’ dividend yield (IAD divided by market capitalization) was higher by 68 basis points, or 2.95% vs. 2.27%. The DJIA companies’ five-year, weighted average-dividend-growth rate was 12.70%, compared with the Dow Jones U.S. Index’s 18.22%.

     “One of the market’s subtle truisms is that many investors track the DJIA for more than just its day-to-day pricing figures,” Mr. Krein said. “As we can see with the dividend information, there is much to be learned about the broad U.S. market by mining The Dow’s component companies’ data for useful indications that enable investors to make informed decisions about their investment portfolios.”

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