"Confidence Despite Economic Recession" S&P 500 Companies' Dividend Payments Reach Record High

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the U.S. stock market continues its downward trend this year, the dividend payments by S&P 500 companies in the second quarter of this year reached 184 trillion won, marking an all-time high. This is interpreted as an effort to show confidence in their earnings to investors who are feeling uneasy.

On the 12th (local time), the Wall Street Journal (WSJ), citing data from S&P Dow Jones Indices, reported that the dividend payments by S&P 500 companies this year amounted to $140.6 billion (approximately 184 trillion won). This represents a 13.9% increase compared to the same period last year and a 2.2% increase compared to the previous quarter.

The dividend payments by S&P 500 companies have set new records every year on an annual basis, except for 2020 when the COVID-19 pandemic was severe. Howard Silverblatt, senior analyst at S&P Dow Jones Indices, predicted that dividend payments will again reach record highs in the third quarter and for the full year.

Analyst Silverblatt noted that the pace of dividend payments this year is faster than in other years and forecasted that annual dividend payments will increase by more than 10% this year. Last year marked the first double-digit increase in dividend payments since 2014, and this trend is expected to continue this year.

Silverblatt said, "Companies want to send a message to investors that they are in a solid state," adding, "If they can maintain and even expand dividend payments despite difficult circumstances, it signals confidence in their business outlook." Given that the U.S. is experiencing the worst inflation in 40 years and investors are focusing on the impact on corporate earnings, this is interpreted as an attempt to reassure investors through dividends.

S&P Dow Jones Indices also reported that companies actively repurchased their own shares using cash in the second quarter of this year, reaching a record high of $296.4 billion.

This content was produced with the assistance of AI translation services.