2010 Saw Better Dividend Payments

Only 28 of the approximately 7,000 publicly-owned companies that report dividend information to Standard & Poor's decreased their dividend payment during 4Q2010.

This is an improvement from the 74 that lowered their dividend payment during the fourth quarter of 2009, according to a Standard & Poor’s press release. Dividend increases rose 43.8% during the fourth quarter to 696, from the 484 recorded during the fourth quarter of 2009.  

For the year, 145 issues decreased their dividend payment compared to 804 in 2009, with the associated decrease of income being $2.8 billion for 2010 (versus $58 billion in 2009). Increases rose to 1729 from the 1191 registered in 2009 with the aggregate adding $29.4 billion in increases compared to $15.6 billion in 2009.  

“Dividend investors hit the trifecta in 2010,” said Howard Silverblatt, Senior Index Analyst at S&P Indices, in the announcement. “Dividend increases were up 45%, decreases declined 82%, and best of all, the forward indicated dividend rate increased over 8% implying a much better year for dividend income in 2011.”  

S&P Indices also reports that for the fourth quarter of 2010, the forward net change in the indicated dividend rate increased $8 billion, comparing favorably to the $3.3 billion registered in the fourth quarter of 2009. On a dollar basis, 2010 saw a net gain in annual dividend rates of $26.5 billion compared to a $42.4 billion decline in rates during the comparable period in 2009.   

Additionally, Silverblatt reports that individuals have directly saved $274 billion on qualified dividend tax cuts from 2003 through the 2010 period.  

For 2011, Silverblatt expects to see more dividend increases with even fewer decreases, but says the recovery in dividends will continue to be slow and contingent upon companies meeting their sales and profit targets. He anticipates that it will take until 2013 for the broader dividend market to return to the 2007/2008 levels.