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The Top 10 S&P 500 Companies with the Lowest Dividend Growth

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Part 2
The Top 10 S&P 500 Companies with the Lowest Dividend Growth PART 2 OF 18

How Have the Low-Dividend Sectors Performed?

The outlook for the healthcare, utilities, and technology sectors

In contrast to the energy sector, the healthcare sector has gained 20% on a year-to-date (or YTD) basis and has a dividend yield of 1.9%. According to Deloitte, the prospects of this sector have been propelled by growing demand and expenditures for the aging population, as well as the occurrence of long-term diseases.

Other factors include the presence of additional diseases co-occurring with the primary disease, as well as the development of expensive clinical innovations, growing awareness, and rising economic uncertainty.

How Have the Low-Dividend Sectors Performed?

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The utilities sector has garnered 14.2% on a YTD basis and has a dividend yield of 3.8%. According to PricewaterhouseCoopers, the sector’s revenues have taken a beating due to the conflicting goals of innovation and economization.

The technology sector has gained 35.5% on a YTD basis and has a dividend yield of 0.9%. Cloud computing, the Internet of Things (or IoT), drones, virtual reality, machine learning, and artificial intelligence have contributed to this growth.

Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Facebook (FB), and Microsoft (MSFT)—also known as the Big Five—led the tech rally. PricewaterhouseCoopers had projected these companies to dominate.

The group known as the Next 20, which includes Symantec, is generating some buzz in the sector. However, competitive threats are present in this sector from China.

Comparison with broad indexes

The S&P 500 (SPX-INDEX) (SPY) offers a dividend yield of 2.3%, a price-to-earnings (or PE) ratio of 22.7x, and a YTD return of 15.5%. The Dow Jones Industrial Average (DJIA-INDEX) (DIA) has a dividend yield of 2.3%, a PE ratio of 21.2x, and a YTD return of 18.7%.

The NASDAQ Composite (COMP-INDEX) (ONEQ) has a PE ratio of 25.4x and a YTD return of 25.4%.

The Global X SuperDividend US ETF (DIV) is a dividend ETF with 27.0%, 13.0%, and 2.0% exposure to utilities, energy, and healthcare, respectively. DIV has a PE of 15.0x and a dividend yield of 6.1%.

The First Trust NASDAQ Rising Dividend Achievers ETF (RDVY) is a dividend ETF with 21.0% and 10.0% exposure to the technology and healthcare sectors, respectively. It has a PE ratio of 15.7x and a dividend yield of 1.2%.

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