Another killer chart from Bob Bronson:

Since the S&P 500 dividend to earnings payout ratio has skyrocketed to 113% with dividends being cut at a record pace, the price-to-dividend ratio high for both the coming Supercycle Bear Market low and for the eventual end of the Supercycle Winter Period remains as elusive to panicking investors as the price-to-earnings ratio low. But we have reversion-to-the-extreme estimates.


click for bigger chart


See Also:
S&P 500: $16.6 billion in dividend cuts in first quarter
Dow Jones Industrial Average has worst weekly loss since Oct. 10
Kate Gibson
MarketWatch, 4:45 PM ET Feb 20, 2009

Category: Dividends, Markets, Technical Analysis, Valuation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Dividend to Earnings Payout Ratio”

  1. RussGlisker says:

    Doesn’t the rather markedly different interest rate environment now as compared to past cycles need to be considered?

  2. One would think that is reflected in the chart . . .

  3. DaveO says:

    I was hearing talk last night of a banking plan hitting the street Monday morning, a move intended to address all the nationalization talk etc. No follow up or detail today, have you heard anything?

  4. CyHastings says:

    I think would we would be extremely lucky if the P/D only quadrupled.

    That graph is SCREAMING “Look The Fuck Out Below!”

    If P/D hit 7%….where would that put the S&P roughly??? 400ish??

  5. wswainwright says:

    more reading of the tea leaves… next it will be reading sacrificial animal entrails.
    Reversion to the extreme? Haven’t picked that one up before, guess there’s a first time for everything!

    Unless I’m missing something, isn’t the y-axis actually dividend/price?

  6. farmera1 says:

    OK, wswainwright, I thought I was going nuts, looking through the looking glass sort of thing. The y-axis has to be as you said dividend/price.

    Or, in this new world of new financial engineering changes (aka the NEW math), maybe I’m loosing it or up is down, left is right, nationalization is privately owned. You get the idea.

    Can someone confirm I’m not nuts, never mind.

  7. Broken says:

    I am sticking with an S&P bottom in the 650-700 range by Sept 09 with a rally on Q3 earnings. In other words, we track the general 1929 trend line until end of Q3 for a 58% drop from the 2008 peak.

  8. Vasastan says:

    One thing that seems to be missing from the graph is the impact of share buybacks during the past two decades. Including those would shift the curve a bit.