Informed Dividend Investors – Q2 2023


Given all of the uncertainties over a potential recession, earnings, and increases in both government and corporate debt costs, it’s no surprise that dividend increases were down and dividend decreases were up in Q2 2023. According to S&P Dow Jones Indices, the net change in U.S. dividend payments slowed in 2Q. In fact, the net change for U.S. domestic common stocks was up only $4.3B during 2Q 2023, compared with net increases of $9.7B in 1Q 2023 and $17.6B in 2Q 2022. Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, said, “For 2023, the dollar aggregate of dividends is still expected to increase, but at less than half the pace of the double-digit growth reported in 2022. Given the current environment, we expect this to be in the 4% area, with the potential for additional growth.”

As dividend volatility picks up, we feel now is an excellent time to remind investors of several key factors to keep in mind when considering dividend investment opportunities, both to help mitigate volatility and potentially to increase the cash flow sustainability of their portfolios…

Dividend Investors publication, we address and explore ways to mitigate the volatility of dividend payments…


Different industries and businesses experience varying levels of volatility in their dividend payments.


To mitigate the impact of dividend volatility from any single investment, investors can diversify their portfolio across different industries and types of companies.


A company’s record of dividend payments can provide insights into its commitment to returning value to shareholders.


External factors such as economic downturns, changes in interest rates, and geopolitical events can impact a company’s ability to maintain or grow its dividend.


Companies with stable and predictable earnings are more likely to offer consistent dividends. If a company’s earnings are erratic, its ability to sustain or increase dividends may be compromised during lean periods.

  • 460 dividend increases were reported during Q2 2023 compared to 555 during Q2 2022, a 17.1% year-over-year decline.
  • 65 dividend decreases were reported during Q2 2023 compared to 51 during Q2 2022, a 27.5% year-over-year increase.


A company with healthy cash flow is better positioned to maintain stable and growing dividend payments, even if earnings fluctuate.

Some companies have formal policies that clearly define their commitment to paying dividends, including their frequency, stability, and growth rate.

The dividend payout ratio, which is the proportion of earnings paid out as dividends, is an important indicator of dividend sustainability. High payout ratios suggest that the company is distributing a significant portion of its earnings as dividends, leaving less room to buffer against downturns. This can lead to greater dividend volatility.

High debt levels can strain a company’s ability to pay dividends consistently, especially during challenging economic times. As we have seen in the past, debt obligations, especially for more highly leveraged companies, can often take priority over dividend payments.

  • The S&P 500 indicated dividend yield was 1.54% as of 6/30/23, down about 8.9% Y/Y.
  • Real Estate, Energy, and Utilities continue to be the highest-yielding sectors.
  • The lowest-yielding sectors were Consumer Discretionary, Information Technology, and Communications Services; all below 1%.


Companies in the growth phase of their business lifecycle might choose to reinvest their earnings into expanding sales or operations rather than paying dividends. As a result, the dividend payments of growth companies might experience greater variability or rise more slowly during higher growth periods.

At DAC, we believe understanding the key factors that could impact the stability and future growth of a company’s dividend payments is crucial for investors looking to build a stable and reliable income stream from their dividend investments.

• According to Bloomberg data, as of 06/30/2023, 14,320 stocks were listed on U.S. Stock Exchanges and domiciled in the U.S.
• Among those stocks, only 1,416 or less than 10% are expected to pay dividends in the next 12 months.
• Among those expected to pay dividends, only 393 companies are projected to deliver dividend growth rates over the next three years at or higher than 10% annually, or less than 3% of the listed securities.
• Those 393 companies have an average market cap of $34B and an estimated dividend yield for the next 12 months of 3.14%, 118 bps higher than the S&P500 Index indicated yield of 1.96%, due to higher anticipated dividend growth.
• Within DAC’s investment universe, 57% of companies grew their dividend over the last 10 years by 10% to 15%, 22% grew it 15% to 20%, and 21% of the companies grew their dividend by more than 20%.


  • According to the most recent update from Ned Davis Research (6/30/2023), “Dividend Growers and Initiators” have outperformed all other dividend policies as well as the S&P 500® Equal-Weighted Index, continuing to demonstrate the power of compounding dividend growth.

1 S&P Dow Jones Indices (S&PDJI). “S&PDJI Reports U.S. Common Indicated Dividend Payments Increases Slow…” S&P Dow Jones Indices Press Release, July 5, 2023. Accessed July 7, 2023.

This information is for illustrative purposes. Material presented has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future. Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. S&P 500® Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy, focusing on the large-cap segment of the market, with over 80% coverage of U.S. equities. Information presented is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities which may be mentioned herein.

Dividend Assets Capital, LLC (“DAC”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses before investing. The Firm’s Investment Adviser Brochure, Form ADV Part 2, contains this and other information about the Firm, and should be read carefully before investing. You may obtain a current copy of DAC’s Form ADV Part 2 by visiting our website at, emailing, or by calling us at (866) 348-4769. Additional information about Dividend Assets Capital, LLC is also available on the United States Securities and Exchange Commission’s website at YYou may search this site using a unique identifying number known as a CRD. DAC’s CRD is 129973. DAC-23-038

Dividend Assts Capital, LLC is an independent, employee-owned wealth advisor specializing in high quality companies with a history of consistently increasing dividends. Built on a pioneering legacy, our goal is straightforward; achieve our clients desired outcomes through investments that provide sustainable and rising income with long-term capital appreciation. We partner with successful families, advisors and institutions delivering tailored services that adhere to fiduciary principles to provide…

Clarity: A transparent and understandable approach to portfolio management.

Simplicity: We believe dividends are the best indicator of the future price performance of a stock.

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