Can we get a dividend verify in right here, Big Tech?
The dividend yield on the S&P 500 (^GSPC) is nearing 50-year lows at a paltry 1.24%, Trivariate Research founder Adam Parker identified in a brand new word on Tuesday. The solely decrease second for dividend yields dates again to the tech bubble trough, when it stood at 1.09% (chart beneath).
Over the final 100 years, the S&P 500 has averaged roughly a ten% annual return, with roughly 30% of that coming from dividends, Parker stated.
Blame Big Tech.
“The percentage of companies with a dividend sits at 56.5%, not meaningfully different from the last 25 years. Hence, it is clearly the largest companies by market cap having low / no dividends that are driving this current regime,” Parker stated.
Read extra: How to protect your money during turmoil, stock market volatility
Big Tech names — which have dominated the composition of the S&P 500 — notoriously pay no dividends or minimal ones. The considering right here is that behemoths resembling Microsoft (MSFT) and Nvidia (NVDA) are perpetually in high-earnings-growth mode, rewarding buyers with increased inventory value returns.
So there isn’t any have to ship a dividend verify to buyers. Instead, they will reinvest the money into the enterprise or inventory buybacks.
Where dividend yields stand amongst the “Magnificent Seven,” per Yahoo Finance knowledge:
Tesla (TSLA): 0%
Amazon (AMZN): 0%
Nvidia (NVDA): 0.02%
Microsoft (MSFT): 0.16%
Alphabet (GOOGL): 0.27%
Meta (META): 0.33%
Apple (AAPL): 1.16%
But maybe it is time for Big Tech boards to contemplate dividends, as earnings progress has slowed and buyers fret about monumental money move being spent to construct out AI infrastructure. Paying out dividends may very well be an indication of confidence in these longer-term investments, a welcome register the present surroundings.
The Magnificent Seven shares are hovering round recent lows relative to the S&P 500, JPMorgan strategist Mislav Matejka wrote in a note today.
“Mag 7 relative [to S&P 500] is not acting as a safe haven,” Matejka stated.
As of early April 2026, the Magnificent Seven giants have collectively misplaced $1.1 trillion in market cap this yr.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial management crew. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on tales? Email brian.sozzi@yahoofinance.com.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
