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Earnings are Down, but Dividends are Up

Stock prices tend to track corporate earnings over the long run. S&P 500 corporate earnings have been flat-to-down over the past 18 months, which explains the sideways trajectory of the stock market (left chart). Without a rebound in earnings, it may be difficult for stocks to make much headway.

Dividends are up considerably, however. Since earnings peaked in October 2014, S&P 500 companies have paid 14.5% more dividends, a 9.6% annualized increase (right chart). Indeed, dividend growth has been a steady, stealth source of return for investors, with S&P 500 dividends rising 6.4% annualized since the turn of the century.



DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.
Investment Advisory Team

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Hefren-Tillotson Inc. is a leading diversified financial services firm providing investment and retirement plan management and comprehensive, financial planning through MASTERPLAN® for individuals and businesses. The firm’s wealth management services are administered by Certified Financial Planner (CFP) professionals, Chartered Financial Analyst (CFA) Charter holders, attorneys, Chartered Life Underwriters, and CPA/PFS’s. Hefren-Tillotson offers corporate services including 401(k) retirement planning, executive financial counseling, fiduciary reviews and workplace financial planning seminars. Founded in 1948, the firm is headquartered in Pittsburgh and has offices located in Pittsburgh, Butler, Greensburg, North Hills, and South Hills.