This week, I read Daniel Peris' book on dividends called "The Ownership Dividend: The Coming Paradigm Shift In The U.S." I highly recommend this book to anyone who wants a historical breakdown of dividends and an explanation of why people are indifferent towards dividends today.
One of the datasets that Daniel Peris mentioned in the book was Robert Shiller's stock data that goes back to the year 1871.
According to Shiller's data, the average dividend payout ratio for companies in the S&P 500 from 1871 to 2023 was ~60%. Today, the average payout ratio is ~37%. This low payout ratio is strange because companies in the past were more capital intensive than companies today, and they still managed to grow their business and pay shareholders a good dividend.
If the top companies in the S&P 500 today had a 60% payout ratio, they would pay the following dividends per share:
Companies | Current Payout Ratio % | Current Annual Dividend Per Share | Annual Dividend Per Share With 60% Payout Ratio |
Microsoft | 25% | $3.00 | $7.09 |
NVIDIA | 1% | $0.16 | $14.51 |
Apple | 13% | $0.96 | $4.40 |
Amazon | 0% | $0.00 | $2.41 |
Meta | 10% | $2.00 | $11.66 |
0% | $0.00 | $4.59 |
*Numbers are based on the companies' latest financial statement.
The gap between what companies are paying shareholders and what they should be paying is enormous. Investors are being robbed by corporate executives, and they don't seem to care or recognize it. Shareholders think it's normal for established companies to take our money and never pay us a dime, but history shows this type of relationship between public companies and shareholders is not normal.
People might think that I'm misguided and overreacting, but I deal with so many charming businesspeople who are crooked to the core that I can sense when a con game is being played.
This week, I sent a letter to the Securities and Exchange Commission (SEC) and a Senator, asking them to investigate the current situation in our stock market where Management Teams and Board of Directors are paying themselves huge salaries and bonuses, but they find every reason to not pay shareholders what is rightfully ours.
Letter below:
Email me if you have any questions or comments. ov@myinvestmentdreams.com
Stay strong, stay blessed, and God willing, I will see you next week.
“You shall not steal; you shall not deal falsely; you shall not lie to one another.
Leviticus 19:11 ESV
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