Dividends are getting more popular with investors, and a
slowly improving economy is making companies more comfortable
That's the conclusion of Dow Jones Indices. It says dividends
paid by public companies increased by $12.7 billion during the
fourth quarter of 2013 compared to an $8.4 billion boost in the
same quarter of 2012.
For the year, 2,895 companies increased their dividend rate,
slightly up from 2,887 that did so in 2012. But the rate was up a
whopping 48.2% in 2011.
Actual cash payments in 2013 set a new record, up 10% from the
Out of a universe of 10,000 companies, only 51 either reduced
or suspended dividends in Q4 2013 compared to 154 in the year-ago
Dow Jones said 418 companies in the S&P 500 pay a
dividend, along with all 30 members of the Dow Jones industrial
average. Generally, only mature companies pay dividends. Younger,
fast-growing companies typically plow profits into generating
Dow Jones noted that payout ratios, the percentage of income
paid out as dividends, are historically low. The long-term
average is 52%, but they are now near a low point of 36%. So Dow
Jones expects dividends to continue to increase during Q1 of
During the last quarter, the weighted dividend yield declined
to 2.44% from 2.6% in the previous quarter and from 2.8% in Q4 of
Copa Holdings (
), featured in Monday's
, is an example of a company that revamped its dividend policy
Rather than an annual payout, it will pay out quarterly, which
income investors prefer. It's also increasing its payout from 30%
of estimated net income to 40%.
Copa currently pays out $2.91 a share for a 1.8% yield. The
stock was off 7 cents Monday to close at 160.13.