Please read the December 2008 report at contraryinvestor.com
A couple excerpts
' As you look back over the period of the 1910's through 1940's, there were a number of periods where equity market dividend yield spiked very significantly. We all know that was a result of a decline in equity prices as opposed to a massive increase in company dividends. But the important issue is that post these clear and significant spikes, aggregate equity yields dropped like a rock. Was the subsequent drop in S&P dividend yield a result of massive equity market rallies? Far from it. It resulted from huge drops in nominal dollar S&P dividends themselves. Companies either went bankrupt or cut dividends very meaningfully.'
'Can we now suggest that we need to at least be open to the idea that change in US credit cycle dynamics ahead may indeed portend change in the character of US corporate dividends to come? And as the credit cycle continues to reconcile, could we possibly be looking at a future decline in aggregate S&P dividends paid?
Again, we think this is a fair line of reasoning and deserves both consideration and monitoring in forward decision-making.'