Thursday, August 28, 2008

Company Dividend Actions Not As Bad As News Would Lead One To Believe

Standard & Poor's maintains a monthly dividend action report on thousands of publicly traded firms. For the 12-month period ending July 31, 2008, S&P reported the number of increases declined 17.4% on a year over year basis. As detailed in the chart below, the number of firms that increased their dividend for this 12-month period totaled 1,601 versus 1,938 increases for the 12-months ending July 31, 2007.

(click on chart for larger image)

dividend increase chart 12-months ending July 31, 2008
Although increases have declined by a relatively large percentage, the number of dividend declarations for the 12-months ending July 31, 2008 are only down 1.5% to 35,422 versus 35,950 declarations for the 12-months that ended July 31, 2007. Further, comparing the July, 2008 declarations to the July, 2006 declarations (two years earlier) shows dividends declared are up 1.8% (35,422 versus 34,788). And finally, the July 2008 total represents an increase of 5.9% over the total 33,430 achieved in 2005.

(click on chart for larger image)

dividend declarations chart 12-months ending July 31, 2008
In spite of the tough dividend increase period over the last 12-months, the number of companies declaring dividends continue to trend higher on a longer term basis. That is not to say one should not pay attention to the near term dividend activity, but it is important to look at both the near and long term picture.

Standard & Poor's Monthly DividendAction Report (Excel File)

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