S&P 500 companies' dividends fall 21 percent

AP News
Posted: Dec 07, 2009 4:07 PM

Although stock market gains since March may make some investors feel bullish, those who seek income from dividends are no doubt disappointed with the year's results.

Dividend payments from S&P 500 companies fell more than 21 percent in 2009 from the year before, Standard & Poor's said Monday. That means investors saw $52.6 billion dollars less in dividend payments than in 2008.

The S&P 500 dividends are expected to total $195.3 billion this year, down from $247.9 billion paid in 2008.

Index analysts said 78 companies decreased or suspended payments this year. That's in addition to 62 companies which cut dividends last year.

Although 147 companies in the S&P 500 index increased dividends this year, it's significantly fewer than the 241 that boosted dividends in 2008, said Howard Sliverblatt, senior index analyst, in a statement.

Next year looks better, with Standard and Poor's expecting dividends to grow about 6 percent.

"While we do expect additional dividend decreases, Standard & Poor's believes that improving economic conditions will inspire companies to slowly increase their payouts," Silverblatt said.

Dividend rate increases are expected to improve significantly in the second half of the year, he said.

Since dividends grow about 5.6 percent a year historically, it would take several years of above normal increases to make back what has been lost this year, Silverblatt said.