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Portfolio > Portfolio Construction > Investment Strategies

Fewer Firms Increasing Dividends

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Standard & Poor’s announced that of the approximately 7,000 publicly owned companies that report dividend information to Standard & Poor’s Dividend Record, only 377 increased their dividend during the third quarter of 2006. This represents a 3.6% decline from the 391 issues that increased their dividend during the third quarter of 2005. Furthermore, Standard & Poor’s Dividend Record reports that September 2006 dividend increases dropped 17.6% to 89 from the 108 recorded during the same period last year.

“While Standard & Poor’s attributes the slowdown in dividend growth to the rapid rise in share buybacks, the declines mark the first downturn in dividend increases since their rebirth in 2003,” said Howard Silverblatt, senior index analyst at Standard & Poor’s, in a statement.

On the other hand, Standard & Poor’s records show that dividend extras, such as one-time dividend increases and special dividends, increased by 12.8% to 88 during the third quarter of 2006. That’s up from the 78 recorded during the third quarter of 2005. Also, overall dividend payments continue to grow, marking a 9.0% year-to-date gain over 2005, and a 21.3% gain over 2004.


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