S&P released its domestic dividend report for the first quarter of 2010 in early April. The report covers roughly 7,000 publicly traded companies and tracks dividend payments on a quarterly basis.
According to the index provider, the first quarter was a veritable bonanza of dividends in comparison with the prior year: Only 48 companies lowered their dividend in Q1 2010 versus 367 in Q1 2009. At the same time, 399 companies raised their dividends, as opposed to 283 in 2009.
Meanwhile, the forward net change in the indicated dividend rate saw a $6.4 billion increase, whereas in 2009 it fell by $43.8 billion during what S&P says was the worst dividend quarter in history.
Importantly, S&P Senior Index Analyst Howard Silverblatt noted that coverage ratios have increased, with more companies covering their dividends with earnings as market conditions improve.
“The first quarter represents a rebirth of dividends in the U.S. domestic market and speaks to the higher confidence that board of directors are placing in both the economic recovery and their future earnings ability,” Silverblatt said. He added that S&P expects dividends to pull themselves out of the muck to their 2007 and 2008 levels by 2013 after a slow recovery tied to an improving economy. |
