A First Look at the Future for S&P 500 Dividends Through 2024

Dividend futures for the S&P 500 (Index: SPX) are now available for each quarter through the end of 2024.

Technically, they became available shortly after the dividend futures contracts for 2023-Q3 expired on Friday, September 15, 2023 as the CME Group began publishing its S&P 500 quarterly dividend futures for 2024-Q4. In the four weeks since, the projected value of dividends for 2024-Q4, the most distant future quarter for which we now have available data, has been stable.

That stability matters because dividend futures data for the most distant future quarters can be especially volatile during the weeks after they are first reported. They can take several weeks and sometimes longer to settle down and start giving a good estimate of the expectations investors have for the amount of quarterly dividends per share that will be paid out so far into the future.

The following chart presents the CME Group’s projected quarterly dividends for the S&P 500 for each quarter from 2021-Q4 through 2024-Q4. The past quarters of 2021-Q4 through 2023-Q3 represent the final value the CME Group’s dividend futures recorded for the index on the date the dividend futures contract for the indicated quarter expired. The future quarters of 2023-Q3 through 2024-Q4 present the amount of dividends per share expected to be paid out during each of these quarters before the expiration of their associated dividend futures contracts as of 13 October 2023.

This chart presents only dividend futures data to provide only an apples-to-apples comparison between all of the indicated quarters. Looking at the projections for 2024′s quarters, in the near term, investors anticipate rising dividends on a year-over-year basis through 2024-Q3. However, investors also currently expect quarterly dividend payouts will decrease on a quarter-over-quarter basis in the second half of 2024, ending with a year-over-year decline in 2024-Q4. There’s still a lot of time between now and then for that outlook to change, and it will, so we’ll be paying closer attention to how those expectations change after 2023 ends.

Speaking of which, we’ll take our next regularly scheduled snapshot of the outlook for the S&P 500′s quarterly dividends per share sometime next month, with a special focus on the current and final quarter of 2023. We’ll be taking a look backwards at how the expectations for 2023-Q4 have changed throughout the life of its dividend futures contracts.

More About Dividend Futures Data

Dividend futures indicate the amount of dividends per share to be paid out over the period covered by each quarters dividend futures contracts, which start on the day after the preceding quarter’s dividend futures contracts expire and end on the third Friday of the month ending the indicated quarter. So for example, as determined by dividend futures contracts, the now “current” quarter of 2023-Q4 began on Saturday, 16 September 2023 and will end on Friday, 15 December 2023.

That makes these figures different from the quarterly dividends per share figures reported by Standard and Poor. S&P reports the amount of dividends per share paid out during regular calendar quarters after the end of each quarter. This term mismatch accounts for the differences in dividends reported by both sources, with the biggest differences between the two typically seen in the first and fourth quarters of each year.

Image credit: Stock Dividend by Nick Youngson/Alpha Stock Images on Picpedia.org. Creative Commons. CC BY-SA 3.0 DEED.