MSCI World Stock Dividends vs. Earnings Drawdowns

Here is an interesting chart that shows the historical drawdown rates of dividends vs. earnings for the MSCI World index (which tracks large/mid-cap stocks on a global cap-weighted basis). Taken from the Mid-Year Investment Outlook 2025 from JP Morgan Asset Management. An excerpt (emphasis mine):

Income-oriented strategies are also likely to prove relatively defensive. In an earnings contraction, dividend growth typically pulls back by roughly half that of earnings, helping to buffer total returns from stock price drawdowns (see Exhibit 16). With payout ratios at low levels and corporates pulling back from capex, investors might expect even greater dividend resilience in a slowdown scenario today than has been typical historically.

I avoid daily market commentary and honestly don’t care if the NASDAQ closed up 1% or down 1% today, but these market insights can provide a nice overview of what people are worried about along with some thoughtful context.