The Biggest Dividend Payers
The Biggest Dividend Payers 2020. I was reading a recent update about a study on long-term global dividend trends. This is study by Janus Henderson that dates back to 2009 as a baseline. The study is updated monthly. One interesting factoid in the study that caught my eye was the biggest or largest global dividend payers. I am not talking about yield, but rather absolute dollar value of dividends paid. Many people including I always assume that U.S. stocks top the ranking. I mean AT&T (T) alone pays out close to $15 billion per year in dividends. But surprisingly AT&T is not No. 1 on the list of biggest dividend payers in 2020 globally or even in the U.S.
So which company is No. 1 and which ones are in the top 10 in the U.S.? This information is not easily found. Most of you are probably guessing the usual suspects of AT&T, Apple (AAPL), and Exxon Mobil (XOM). Yes, they are on the list, but which other companies are on the list of biggest dividend payers.
Biggest Dividend Payers 2020 Listed in the U.S.
If we focus on cash flow to pay dividends and major U.S. listings there are only ten companies listed on U.S. exchanges that actually pay over $10 billion annually in dividends. We are not including special dividends in this list. To generate the list, I use Stock Rover* filtering by dividend cash flow over $10 billion. You can see in the screenshot below that Novartis (NVS) is No. 1 at $20,961 million. Novartis trades as an ADR on the NYSE. There are two other ADRs on this list: Sanofi (SNY) and Toyota Motor (TM) at $18,546 million and $11,889 million in dividends paid annually.
The interesting part is that all 10 of these companies are market leaders and have performed well or at least decently for many years. The other point is that both Microsoft (MSFT) and Apple (AAPL) would not be on this list a short decade ago. Microsoft started paying a small dividend in 2003 and Apple only started paying a dividend again in 2012. However, both are climbing rapidly up the list biggest dividend payers due to their prodigious cash flow and high profitability.
Biggest Dividend Payers 2020 Performance
So how have these stocks performed. Over the past 1-year the biggest dividend payers have returned +8.0% while the S&P 500 has returned +18.3%. Not great but OK by itself. Some of this is likely to do with the poor performance of AT&T and Exxon Mobil over the past year. Some of this is due to changing market leadership during the coronavirus pandemic. I have written in-depth articles on the dividend safety of AT&T and the dividend safety of Exxon Mobil if you want a deep dive into the stocks.
Select Data on the Biggest Dividend Payers 2020
So, which of the biggest dividend payers are undervalued? In today’s market one can argue none. Which stock has the highest yield? Let’s take a look at the data in a watch list. I am long both Apple and Microsoft on this list as many people are. I would probably personally take a position in Johnson & Johnsons (JNJ) at the right price as well. Overall, when you are trying to build wealth you likely tend to look at stocks with past proven success.
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Dividend Increases and Reinstatements
Old Republic International (ORI) declared a special dividend of $1.00 per share.
Darden Restaurants (DRI) hiked the dividend 23.3% to $0.37 per share from $0.30 per share. Darden had previously cut the dividend.
Washington Trust Bancorp (WASH) raised the dividend 2% to $0.52 per share from $0.51 per share. This is the 10thconsecutive annual increase. Washington Trust is a Dividend Contender. The bank is the oldest community bank in the U.S.
Kite Realty Group Trust (KRG) increased the dividend 87.5% to $0.15 per share from $0.08 per share. Kite had previously cut the dividend.
ABM Industries (ABM) hiked the dividend 2.7% to $0.19 per share from $0.185 per share. This is the 54th straight yearly increase in a row. ABM is a Dividend King.
Amgen (AMGN) raised the dividend 10% to $1.76 per share from $1.60 per share. This is the 10th consecutive annual increase. Amgen is a Dividend Contender.
Franklin Resources (BEN) increased the dividend 3.7% to $0.28 per share from $0.27 per share. This is the 40th year in a row of increases. Franklin is a Dividend Aristocrat and Dividend Champion.
Waste Management (WM) hiked the dividend 5.5% to $0.575 per share from $0.545 per share. This is the 18thconsecutive annual increase. Waste Management is a Dividend Contender.
Eli Lilly (LLY) raised the dividend 14.9% to $0.85 per share from $0.74 per share. This is the 7th yearly increase in a row. Eli Lilly is a Dividend Challenger.
Coronavirus Dividend Cuts and Suspensions List
I updated my coronavirus dividend cuts and suspensions list this past Wednesday. The number of companies on the list has risen to 491. We are well over 10% of companies that pay dividends having cut or suspended them since the start of the COVID-19 pandemic. The number of companies on the list continues to rise each week.
No new companies were added to the list in the past week.
I included five companies that I had previously missed. The five companies that I previously missed were Fidus Investment (FDUS), Cadence Bancorporation (CADE), Capital Properties Real Estate (CPTP), Equitrans Midstream (ETRN), and Affiliated Managers Group (AMG).
Market Indices – Biggest Dividend Payers
Dow Jones Industrial Averages (DJIA): 30,188 (+0.47%)
NASDAQ: 12,756 (+3.05%)
S&P 500: 3,710 (+1.27%)
Market Valuation – Biggest Dividend Payers
The S&P 500 is trading at a price-to-earnings ratio of 37.4X and the Schiller P/E Ratio is at about 33.8X. These two metrics are up in the past week. Note that the long-term means of these two ratios are 15.8X and 16.7X, respectively. I continue to believe that the market is overvalued at this point. I personally view anything over 30X as overvalued.
S&P 500 PE Ratio
Shiller PE Ratio
Stock Market Volatility – CBOE VIX
The CBOE VIX measuring volatility was down a couple of points with last week at 21.57 at end of this past week. This is above the long-term average but still a low value. The long-term average is approximately 19 to 20. So, at this point we are just above the long-term average and trending down.
I continue to believe that the VIX is low since both the Pfizer (PFE) and Moderna (MRNA) vaccines have been approved. Further, there is positive news on the stimulus front as the U.S. looks increasingly likely to pass close to a $1 trillion stimulus in the face of a slowing economy and rising infection rates and death rates. The U.S. Congress seems to have rediscovered the art of compromising and is producing a bill that may not be perfect but is at least acceptable to both parties and should add economic stimulus in 2021.
Fear & Greed Index
I also track the Fear & Greed Index. The index is now in Greed at a value of 63 after being in Extreme Greed for three weeks.
There are seven indicators in the index. They are Put and Call Options, Junk Bond Demand, Market Momentum, Market Volatility, Stock Price Strength, Stock Price Breadth, and Safe Haven Demand.
Stock Price Strength is signaling Extreme Greed. The number of stocks hitting 52-week highs compared to those hitting 52-week lows is at the upper end of its range.
Stock Price Breadth is indicating Extreme Greed as the advancing volume is 6.37% more than declining volume on the NYSE.
Market Momentum is indicating Extreme Greed. The S&P 500 is 8.96% over its 125-day average. This is on the higher end over the past two years.
Market Volatility is set at Neutral. The CBOE VIX reading of 21.57 is a neutral reading.
Safe Haven Demand is in Neutral. Stocks are still outperforming bonds by 4.09% over the past 20 trading days. This is near the average over the past two years.
Put and Call Options are signaling Neutral. Put option volume is lagging call option volume by 57.65%, which is lower than normal over the past 2-years.
Junk Bond Demand is indicating Extreme Fear. Investors are accepting 2.24% yield over investment grade corporate bonds. This is historically low but has spiked over the past week.
The number of weekly new unemployment claims were up with last week at 885,000. This is up 23,000 from last week’s revised numbers. After falling below 800,000 for several weeks the new unemployment claims started to trend up three weeks ago. The number went over 800,000 this week suggesting a weakening in the labor market.
For some perspective, one-year ago weekly unemployment claims were only about 229,000. Currently we are 3X – 4X the normal level. The seasonally adjusted insured unemployment rate was 3.8%.
The ten states with the highest unemployment rates were California (7.0), New Mexico (6.7), Alaska (6.6), Hawaii (6.5), Nevada (6.1), Illinois (5.6), Puerto Rico (5.6), Pennsylvania (5.5), Massachusetts (5.4), and the Virgin Islands (5.4).
The U.S Census Bureau reported that U.S. retail sales were down 1.1% in November, compared to revised October sales of a 0.1% decline. October’s drop was the first since April. At $546.5 billion, November’s sales were still up over 4.1% as compared with the same month a year ago. Clothing store sales dropped 6.8%, sales at restaurants and bars were down 4.0%, while vehicle dealerships reported a decline of 1.7%. Purchases at groceries were up 1.9%, also building materials increased by 1.1%, along with online and mail-order retail sales which rose 0.2%.
The U.S. Federal Open Market Committee (FOMC) decided to keep the target range for the federal funds rate in the range of 0.0% to 0.25%. The Fed is also committed to the purchase of $80 billion of Treasury securities, and $40 billion of mortgage-backed securities each month. The benchmark rate will likely stay at near zero until maximum employment is achieved and the inflation rate exceeds 2% over the longer run. The Fed does not expect any changes to the rate in 2021.
The Commerce Department reported that housing starts increased 1.2% to a seasonally adjusted annual rate of 1,547,000 units, a 12.8% increase over last year. November’s starts are sequentially lower, as October starts increased 4.7%. Single-family starts have increased for seven consecutive months.
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.
2 thoughts on “Biggest Dividend Payers 2020 – Dividend Power Week In Review”
I found this a couple of weeks ago. I have had it on the screen sense I found it. I discovered today I get a news letter from you. I do not think I paid for it. I say this because I have more right here than I get in the 2 newsletters. Spinoffs are what I am really interested in. I have not found that yet.I am overwhelmed with all of this. I have not found anything about funds. That I am not interested. DIVIDENDS!!! Thank you
Hello! Thanks for the comment and you’re welcome. My weekly newsletter is free. My blog focuses on dividend paying stocks for the most part.