S&P 500 Dividend Growth To Decelerate

Posted: Apr 09, 2019 10:21 AM

According to the CME Group's quarterly dividend futures, the rate at which S&P 500 dividends are growing will peak in the current quarter of 2019-Q2, then will go on to decelerate through mid-2020.

The deceleration becomes more apparent when we track the trailing twelve month sum of quarterly dividends, the portion covered by dividend futures currently anticipate a peak in 2020-Q1 followed by a potential decline that would take hold in 2020-Q2:

Between now and then, the year-over-year growth rate of S&P 500 dividends per share is projected to decline relatively sharply, falling from double digit growth rates to the low single digits:

Standard and Poor bills the S&P 500 (Index: SPX) as "the gauge of the market economy". And if you consider the direction of dividends in the 21st Century, you can see that's a pretty reasonable statement, where downturns in dividends tend to coincide with periods of recession.

There's a lot of time between now and mid-2020 for expectations of future dividends to change. Which direction do you think they will, and what will that mean for the trajectory of today's stock prices?