Digging Into Dividends – Who Actually Pays DividendsJune 12, 2014
Q: Which sector in the MSCI World Index has the highest percentage of companies paying a dividend?
A: No, it’s not your “bond proxy” sectors like Telecom or Utilities. No, it’s also not coming from the financial sector. The answer,surprisingly, is the Consumer Staples sector.
97.5% of all consumer staple stocks pay a dividend. What may perk investors interest even more is that the Consumer Staples sector actually has the second lowest payout ratio, only behind the Energy sector, at 29.7%.
The Consumer Staples sector also has the highest percentage of stocks raising dividends and the highest percentage of stocks that are “net raisers” (percentage of stocks raising dividends minus the percentage of stocks cutting dividends).
Finally, the Consumer Staples also has the best track record of dividend increases over the past 3, 5, and 10 years. Over a quarter of all Consumer Staples stocks have increased their dividends for 10 consecutive years. This is substantially larger than the 11.1% of stocks in the MSCI World index that have increased their dividends for 10 consecutive years.