Unexpectedly Intriguing!
April 12, 2018

One of the most important and perhaps least well known metrics for the U.S. stock market is the growth rate of dividends for the S&P 500. We thought it was long past time to give this particular data series its due by visualizing the year over year growth rate of the S&P 500's trailing year dividends per share for each month of the 21st Century, starting from the beginning of the last year of the 20th Century and continuing through March 2018, with a bonus projection of the currently expected future for S&P 500 dividend growth through March 2019.

Year Over Year Growth Rate of S&P 500 Trailing Year Dividends Per Share, January 2000 through March 2018, with Projection through March 2019

We've also indicated the National Bureau of Economic Research's official periods of recession in the 21st Century (so far!) on the chart.

As for how to best use this data, you really want to pay close attention to how fast the growth rate of dividends per share is changing, where negative accelerations for dividends generally coincide with falling stock prices, and positive accelerations tend to coincide with rising stock prices.

Update 13 April 2018 But we need to thank Tadas Viskanta for pointing out perhaps the clearest lesson to be learned from the chart: "Recessions are a dividend killer"!

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