Friday, June 18, 2010

Ten Quick Facts about Dividends for the S&P 500

Dividends are alive and well and getting back to normal. At least that is what the data for the first six months of the year would indicate. The following is a brief update on the dividend actions or inaction's of the 500 companies in the Standard and Poors Index for calendar year 2010. This information is based on announced dividend actions as reported by Bloomberg and is taken from Bloomberg Professional Data.
  1. 361 pay a dividend.
  2. 139 do not pay a dividend.
  3. 3 have cut or eliminated their dividends in 2010.
  4. 12 have initiated or reinstated their dividends.
  5. 97 have announced a dividend increase.
  6. The median increase for those companies hiking their dividend has been 6%.
  7. The industries with the most dividend increases have been the Consumer Cyclicals and the Industrials.
  8. Almost all major banks have kept their dividends stable. They appear to be under government orders to do so.
  9. The most surprising dividend hike was Target's nearly 50% increase.
  10. Dividend income for the S&P 500 companies is on track to increase on a year over year basis for the first time since 2007.

Dividend taxes may be going up, but corporations show no signs of opting for share buybacks as opposed to dividend hikes. With US corporations literally rolling in cash flows, we expect more dividend hikes over the remainder of the year.

Target is held by some principals and clients of DCM.