Dividends Are Coming. S&P500 Annual Dividend Index Futures
A few months ago I started this research, research of Equity Index Dividend futures, provided by CME Group.
Well, sounds good. Let's continue..
Were you ready or not, but in February, 2024 Meta platforms (META) announced its first-ever in history cash dividend of $0.50 per share to be paid out on quarterly basis.
“We intend to pay a cash dividend on a quarterly basis going forward,” the company said in a release.
Meta stock surged for 20% after that amid other huge reasons.
Alphabet (GOOG) also issued first-ever dividend of 20 cents per share in April, 2024.
The news, announced alongside first-quarter earnings, helped to send the Google parent’s shares up 15%.
Dividend Market as well as Dividend futures trading shines bright.
Understanding Dividends and Dividend Market Futures
👉 A dividend is the distribution of corporate earnings to eligible shareholders.
👉 Dividend payments and amounts are determined by a company's board of directors. Dividends must be approved by the shareholders by voting rights. Although cash dividends are common, dividends can also be issued as shares of stock.
👉 The dividend yield is the dividend per share, and expressed as a percentage of a company's share price.
👉 Many companies - constituents of S&P500 Index still DO NOT PAY dividends and instead retain earnings to be invested back into the company.
👉 The S&P500 Dividend Points Index (Annual) tracks the total dividends from the constituents of the S&P 500 Index. The index provides investors the opportunity to hedge or take a view on dividends for U.S. stocks, independent of price movement, as S&P500 Dividend Index Futures is a market expectation of how many points Dividends Index will collect by the end of year.
👉 Using the S&P500 Dividend Index as the underlying in financial products, investors can hedge or gain exposure to the dividend performance of the S&P500 Index.
Understanding S&P500 Annual Dividend Index Futures
👉 The S&P500 Annual Dividend Index futures (main technical graph is for 2025 S&P500 Annual Dividend Index Futures) calculates the accumulation of all ordinary gross dividends paid on the S&P500 index constituent stocks that have gone ex-dividend over a 12-month period. The amounts are expressed as dividend index points.
👉 The underlying index for S&P500 Annual Dividend Index futures is the S&P500 Dividend Index. The methodology for the index can be found here at S&P Global website.
👉 Dividend index points specifically refer to the level of index points that are directly attributable to the dividends of index constituents. They typically only capture regular dividends and calculate this on the ex-date of the respective constituents within each index.
👉 In general, “special” or “extraordinary” dividends are not included as dividend points in the respective annual dividend indices.
👉 Futures contract Unit is $ 250 x S&P 500 Annual Dividends Index.
Technical considerations
🤝 Main technical graph (S&P500 Annual Dividend Index Futures 2025) indicates on strong bullish bias. Who knows, maybe at one sunny day even Tesla King, Elon Musk will unleash his E-pocket 😂
🤝 Happy Dividend Market Trading to Everyone! Enjoy!
Well, sounds good. Let's continue..
Were you ready or not, but in February, 2024 Meta platforms (META) announced its first-ever in history cash dividend of $0.50 per share to be paid out on quarterly basis.
“We intend to pay a cash dividend on a quarterly basis going forward,” the company said in a release.
Meta stock surged for 20% after that amid other huge reasons.
Alphabet (GOOG) also issued first-ever dividend of 20 cents per share in April, 2024.
The news, announced alongside first-quarter earnings, helped to send the Google parent’s shares up 15%.
Dividend Market as well as Dividend futures trading shines bright.
Understanding Dividends and Dividend Market Futures
👉 A dividend is the distribution of corporate earnings to eligible shareholders.
👉 Dividend payments and amounts are determined by a company's board of directors. Dividends must be approved by the shareholders by voting rights. Although cash dividends are common, dividends can also be issued as shares of stock.
👉 The dividend yield is the dividend per share, and expressed as a percentage of a company's share price.
👉 Many companies - constituents of S&P500 Index still DO NOT PAY dividends and instead retain earnings to be invested back into the company.
👉 The S&P500 Dividend Points Index (Annual) tracks the total dividends from the constituents of the S&P 500 Index. The index provides investors the opportunity to hedge or take a view on dividends for U.S. stocks, independent of price movement, as S&P500 Dividend Index Futures is a market expectation of how many points Dividends Index will collect by the end of year.
👉 Using the S&P500 Dividend Index as the underlying in financial products, investors can hedge or gain exposure to the dividend performance of the S&P500 Index.
Understanding S&P500 Annual Dividend Index Futures
👉 The S&P500 Annual Dividend Index futures (main technical graph is for 2025 S&P500 Annual Dividend Index Futures) calculates the accumulation of all ordinary gross dividends paid on the S&P500 index constituent stocks that have gone ex-dividend over a 12-month period. The amounts are expressed as dividend index points.
👉 The underlying index for S&P500 Annual Dividend Index futures is the S&P500 Dividend Index. The methodology for the index can be found here at S&P Global website.
👉 Dividend index points specifically refer to the level of index points that are directly attributable to the dividends of index constituents. They typically only capture regular dividends and calculate this on the ex-date of the respective constituents within each index.
👉 In general, “special” or “extraordinary” dividends are not included as dividend points in the respective annual dividend indices.
👉 Futures contract Unit is $ 250 x S&P 500 Annual Dividends Index.
Technical considerations
🤝 Main technical graph (S&P500 Annual Dividend Index Futures 2025) indicates on strong bullish bias. Who knows, maybe at one sunny day even Tesla King, Elon Musk will unleash his E-pocket 😂
🤝 Happy Dividend Market Trading to Everyone! Enjoy!
Trade active:
May 12, 2024
Throwing off more cash
After years of chasing growth at any cost, tech companies are taking a page from the old-school value business playbook—paying dividends. By throwing out more money than they can spend, switching to regular payouts provides more evidence of companies' financial strength, Bloomberg touts in its recent publication, "Dividend Payouts: The Latest Sign of Big Tech's Financial Strength."
While most financial sources today only track cash dividends, Warren Buffett's mentor, Benjamin Graham, actually recommended dividends in kind (i.e., shares) rather than cash payments, saying that stock dividends have both psychological and tax benefits.
“We have long been strong proponents of a systematic and clearly stated policy regarding the payment of cash and in-kind (share) dividends. Under such a policy, dividends in kind (shares) are paid periodically to capitalize all or a specified portion of profits to be reinvested in the business... Dividends in kind (shares) of all types seem to be frowned upon by most academic writers on the subject. question... For our part, we consider this a completely doctrinaire view that does not take into account the practical and psychological realities of investing... The total amount of income tax that could be saved by replacing current cash dividends with stock dividends. The savings are huge."
Benjamin Graham, Chapter 19 - Shareholders and Management: Dividend Policy, The Intelligent Investor
I Do Believe In Dividends
Warren Buffett, like his mentor, believes in owning dividend-paying stocks. Buffett simply doesn't like to pay dividends himself (or rather, he never paid them at all) because he believes he can reinvest them internally in a more tax-efficient manner.
At the 2008 Berkshire Hathaway annual meeting, when asked, “Why don’t you believe in dividends when Benjamin Graham did?” , he replied:
"I believe in dividends, including dividends from companies in which we own shares."
Buybacks Remain in Favor
Share repurchases, which support financial metrics such as earnings per share by reducing the number of shares, remain many companies' favorite way to return money to shareholders. According to Bloomberg, the so-known "Magnificent Seven" have already spent nearly $58.5 billion on buybacks this year and allocated near $11 billion in dividends.
However, the implementation of the Biden administration's plans to further tighten the taxation of buybacks, through a consistent increase in the tax rate from 0% to the current rate of 1% and further to a 4% rate, will likely be able to shift this imbalance in the cash flows of the tech giants.
S&P 500 Annual Dividend Index Futures (Dec 2024)
Throwing off more cash
After years of chasing growth at any cost, tech companies are taking a page from the old-school value business playbook—paying dividends. By throwing out more money than they can spend, switching to regular payouts provides more evidence of companies' financial strength, Bloomberg touts in its recent publication, "Dividend Payouts: The Latest Sign of Big Tech's Financial Strength."
While most financial sources today only track cash dividends, Warren Buffett's mentor, Benjamin Graham, actually recommended dividends in kind (i.e., shares) rather than cash payments, saying that stock dividends have both psychological and tax benefits.
“We have long been strong proponents of a systematic and clearly stated policy regarding the payment of cash and in-kind (share) dividends. Under such a policy, dividends in kind (shares) are paid periodically to capitalize all or a specified portion of profits to be reinvested in the business... Dividends in kind (shares) of all types seem to be frowned upon by most academic writers on the subject. question... For our part, we consider this a completely doctrinaire view that does not take into account the practical and psychological realities of investing... The total amount of income tax that could be saved by replacing current cash dividends with stock dividends. The savings are huge."
Benjamin Graham, Chapter 19 - Shareholders and Management: Dividend Policy, The Intelligent Investor
I Do Believe In Dividends
Warren Buffett, like his mentor, believes in owning dividend-paying stocks. Buffett simply doesn't like to pay dividends himself (or rather, he never paid them at all) because he believes he can reinvest them internally in a more tax-efficient manner.
At the 2008 Berkshire Hathaway annual meeting, when asked, “Why don’t you believe in dividends when Benjamin Graham did?” , he replied:
"I believe in dividends, including dividends from companies in which we own shares."
Buybacks Remain in Favor
Share repurchases, which support financial metrics such as earnings per share by reducing the number of shares, remain many companies' favorite way to return money to shareholders. According to Bloomberg, the so-known "Magnificent Seven" have already spent nearly $58.5 billion on buybacks this year and allocated near $11 billion in dividends.
However, the implementation of the Biden administration's plans to further tighten the taxation of buybacks, through a consistent increase in the tax rate from 0% to the current rate of 1% and further to a 4% rate, will likely be able to shift this imbalance in the cash flows of the tech giants.
S&P 500 Annual Dividend Index Futures (Dec 2024)
