Investors looking for hefty dividend payments in 2009 were out of luck, even though the stock market rallied for much of the year.
Standard & Poor’s said Thursday that there were 804 dividend cuts in 2009, while just 1,191 dividend payments were increased last year. That was the most cuts and fewest increases since S&P began collecting data in 1955.
The dividend cuts were especially hard on investors, costing them a combined $58 billion in income in 2009, said S&P senior index analyst Howard Silverblatt.
Dividend increases peaked during the decade in 2006 when 2,617 companies increased their payments to shareholders. That year just 87 companies slashed their dividend payments.
However, there are signs of improvement. Dividend cuts moderated in the fourth quarter with just 74 companies slashing their payouts, compared with 288 cuts during the same period in 2008.
At the same time increases appear to be bottoming out. Nearly 500 companies increased their dividend payments in the fourth quarter similar to the final quarter in 2008, according to S&P.
“The fourth quarter was in no way a good period for dividends, but compared to recent history it marks a significant improvement, and when added to the stabilization in increases, supports our belief that the worst is over for dividends,” Silverblatt said in a statement.
Silverblatt predicts a recovery in dividend payments will be slow and steady over the next three to four years.
S&P receives dividend data from about 7,000 publicly owned companies to compile the data. (AP)
