Following my post earlier this week on the highest yielding stocks in the Dow, here is a deeper look at the dividends of the S&P 500. While the average yield on the Dow is about 2.8%, the average yield on the S&P 500 is now just over 2.4%.
As the market has rallied, the average yield has continued to fall. In July, the average yield of those stocks paying dividends was 2.7%, in June it was just below 3%, in April it was 3.3% and at the market lows in March it was hovering around 4%. As of yesterday's close, the utility sector had the most components paying a dividend while the telecom sector, with only nine S&P components had the highest average yield at 8.8% (see table).
The distribution of dividends has also shifted since the market lows. The number of stocks yielding between 0% and 2% has nearly doubled, going from 106 to 183. There is now only one stock yielding over 10% compared to 12 in March. Note that these numbers will continue to change as companies announce new dividends (or cuts as we saw during the end of 2008 and early 2009) and see their share prices fluctuate as well.