Tuesday, April 08, 2008

Dividend History Matters

Approximately 7,000 publicly traded companies report dividend information to Standard & Poor's Dividend Record. S&P reports 598 of those companies increased their dividend in the first quarter of 2008. This is a 19.2% decline versus the 740 companies that increased their dividend in the first quarter of 2007. S&P noted in a recent press release that 83 companies decreased dividend payments in the first quarter versus 19 in the same quarter last year.

Howard Silverblatt, Senior Index Analyst at S&P notes:
  • "...larger-cap issues (market value greater than $10 billion) that pay dividends have increased their rate 27.2% of the time versus just 18.7% for lower-cap issues (those under $10 billion)."
  • "Issues that have increased their rate for ten years straight simply cannot just stop raising it; the increase is expected and built into the price of the stock. Conversely, those companies that have increased their dividend every few years have the option of not increasing it as the expectation is not built into the company profile."
Double Hit: Corporate Dividend Growth Deteriorates as Decreases Surge
Standard & Poor's
By: Howard Silverblatt & David R. Guarino
April 3, 2008

No comments :