Companies paid out $19 billion in dividends in the first quarter of 2011, Standard & Poor’s said. And the number of companies increasing dividends rose 27.8% to 510, up from 399 in the first quarter of 2010.
Of the 7,000 companies that report dividend information to S&P, only 30 decreased their dividend payment in the first quarter, down from the 48 that decreased dividends in the first quarter of 2010.
“If dividends were a paycheck, dividend investors would have received a 6.7% raise in the first quarter,” said Howard Silverblatt, senior index analyst at S&P Indices. “Dividend increases were up 27.8% in the first quarter, with dividend decreased off 92% from the record-setting first quarter of 2009. On a dollar basis, dividend investors lost $43.8 billion in the first quarter of 2009. For the first quarter of 2011, they added back $19 billion.”
In the first quarter, 39.3% of issuers were paying a regular cash dividend, up from 37.9% at year-end 2010. However, the average dividend is down slightly at 2.39%, from 2.41% at the end of 2010.
Qualified dividend tax cuts have saved investors a total of $274 between 2003 and 2010, and the two-year extension of the lower dividend tax rate will save investors another $74 billion, Silverblatt said. Further, some of that money will go back into the market, thereby supporting stock prices, he said.
Looking into 2011, Silverblatt expects to see more dividend increases “across the board, as companies continue to demonstrate to investors that they are well into recovery mode. In addition, if the economy continues to improve and home and commercial real estate portfolios don’t deteriorate, we could see a second round of dividend increases for financial late in the year.”