Standard & Poor's reported the number of companies increasing their dividends fell 5.7% in 2007 versus 2006. Of the 7,000 or so firms that report dividend actions to S&P, 1,857 increased the dividend in 2007 versus 1,969 in 2006.
- "The decline in dividend increases reflects the current trend of favoring stock buybacks at the expense of committing to long-term cash dividends," says Howard Silverblatt, Senior Index Analyst at Standard & Poor’s.
- Standard & Poor’s data reveals that negative actions - such as dividend decreases and suspensions - picked up in 2007 amidst heightened concern over the current difficulties within the Financials and Consumer Discretionary sectors. Dividend extras - such as one-time dividend payments and special dividends - increased 1.0% (versus 14.3% in 2006) to 628 from 622 during 2006.
- Howard Silverblatt notes that, while dividend increases within the general market have declined, over 60% of the S&P 500 companies increased their dividend payment in 2007. In addition, Silverblatt estimates that S&P 500 dividend payments will increase 9.3% in 2008.
- "History shows that S&P 500 issues have a greater likelihood to pay dividends than the general market, 78% versus less than 39% for the general market," adds Silverblatt. "In addition, S&P 500 issues have a much greater propensity to increase their dividend rate than the general market."
S&P: Dividend Growth Lags in 2007 as Fewer Issues Pay (PDF)
Standard & Poor's
By: David R. Guarino and Howard Silverblatt
January 3, 2008