Thursday, January 07, 2010

Dividend Actions Largely Negative In 2009, Dividend Growth To Resume In 2010

Standard & Poor's reported 2009 dividend results for the approximately 7,000 companies that report dividend information to S&P. According to Howard Silverblatt, Senior Index Analyst for S&P,
  • 804 companies cut their dividend payments in 2009 which was a 631% increase over the 110 companies that cut their dividends in 2007.
  • In absolute dollars, the cuts represented $58 billion in reduced dividend income.
From a positive perspective, for the S&P 500 Index, negative dividend actions in the 4th quarter of 2009 of 74 were substantially lower than the 288 negative actions in the 4th quarter of 2008. Additionally, positive actions finally turned higher in the quarter totaling 484 versus 475 in Q4 of 2008.

There has been a shift in the composition of the top dividend payers in the S&P 500. Many of the past top payers were financial stocks where financials made up over 20% of the dividend income, they now account for only 9%.

The current top payers (over $5 billion) are:
  • AT&T ($9.9 billion rate)
  • Exxon ($8.0 billion)
  • Pfizer ($5.8 billion)
  • Chevron ($5.5 billion)
  • Johnson & Johnson ($5.4 billion)
  • Verizon ($5.4 billion)
  • Procter & Gamble ($5.1 billion)
S&P's initial estimate for dividends in 2010 is about $23.67. This is 5.6% higher than 2009's dividend estimate of $22.31. If history is any guide, dividends will be an important part of an investor's return in 2010. Since 1926, dividends have accounted for 40% of the S&P's total return. This may be the case for returns in 2010.

2009 Worst Year Ever For Dividends;
Expects 2010 to Show Steady Improvement

Standard & Poor's
By: Howard Silverblatt
January 7, 2009

1 comment :

Anonymous said...

PM's dividend in 2008 was actually higher than PG's for its fiscal year 2009. So I suspect PM will be making this list next year.