Unexpectedly Intriguing!
02 August 2012

Today we're featuring a simple chart showing two streams of data published by Standard and Poor in their S&P 500 Dividend Report, showing the number of companies in any given month that have either increased or decreased their dividends per share since January 2004.

As it happens, we might have stumbled into another alternate indicator of the relative health of the U.S. economy. Here's the chart:

Number of S&P 500 Dividend Increases and Decreases, January 2004-June 2012

The potential alternate economic indicator is seen by a decrease in the number of companies that increase their dividends, and perhaps more significantly, the number of companies that act to cut their dividends, which is much less volatile.

Looking at just the number of companies that acted to cut their dividends since January 2004, it would appear that when there are 10 or more in a given month, it would seem to coincide with periods of time in which the private sector of the U.S. economy is relatively distressed. At least, that's what we see when we look at the most recent recession in the U.S., which officially began in December 2007 and continued through June 2009.

We note that the number of companies cutting their dividends didn't fall back below 10 until February 2010, but given the relative weakness of the private sector economy in the U.S. at that time, perhaps that should be expected.

Meanwhile, a month where the number of S&P 500 companies that cut their dividends is less than 10 would seem to correspond to periods in which the private sector was relatively "healthy" by comparison.

That brings us to today, where we note that the number of S&P 500 companies acting to cut their dividends in today's economy just notched above the "10 line" in May 2012, staying above it in June 2012.

We believe that indicates the U.S. economy is definitively showing signs of distress. The question now is how long will that continue?

Notes

In case the direct link to S&P's Dividend Report doesn't work, the Excel spreadsheet can be accessed through the S&P 500 Monthly Performance Data section of Standard and Poor's Market Attributes site.

Labels:

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations

Thanks in advance!

Recent Posts

Indices, Futures, and Bonds

Closing values for previous trading day.

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

JavaScript

The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Archives