Standard & Poor has updated their data to show the amount of cash dividends per share that the companies that make up the S&P 500 composite index paid through the end of March 2012. We've therefore updated our chart showing the projected amount of dividends per share of the index expected to be paid out over the next year.
We had previously used IndexArb's estimate of the amount of dividends per share expected to be paid in 2012Q1 of $7.18, which was the amount projected on 8 December 2011, which was some 9 cents per share higher than the actual recorded amount. (Note: These amounts may be determined by subtracting the next quarter's projected amount of dividends per share expected to be paid out from the value for the quarter of interest - they are not directly recorded.)
The difference between IndexArb's estimate and S&P's actual recorded figure are likely attributable to changes in the weighting of the index over the past several months, as well as the term mismatch in reported dividends between the full calendar quarters recorded by S&P and the dividend futures contracts used by IndexArb for its projections, which run on a slightly shifted schedule. It is pretty typical for the two sets of values to be within just a few percent of one another and since we focus on changes in the rate of growth of the index' dividends per share, we find IndexArb's dividend futures data to be highly useful for forecasting the future value of the S&P 500 index, although it was actually developed to support a very different function.
Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.
Be the first to read Political Calculation's column. Sign up today and receive Townhall.com delivered each morning to your inbox.
Get the Market Movements in Advance: William's Edge Webinar for Tuesday, March 11th, 2014 | John Ransom