This year is shaping up to be a record year for dividend
payments as companies fill their coffers with cash, according to
a report Wednesday from S&P Dow Jones Indices.
Dividend payments rose by a net 12% in the first quarter to
$14.5 billion, the index provider said. A total of 944 companies
raised their dividends in Q1, up 39.4% from Q1 of 2012.
"At this point, 2013 will easily surpass the 2012 record
dividend payment" that includes special one-time payouts made
late last year ahead of a dividend tax hike, wrote Howard
Silverblatt, senior index analyst at S&P Dow Jones
Yet he noted that payout rates -- the ratio of dividends to
net income -- remain near their lows at 36% vs. the historical
average of 52%.
Companies are still "very nervous about committing going
forward" despite record-high levels of cash, Silverblatt said in
Many companies slashed their payouts during the financial
crisis to preserve cash as profits shrank. Those companies are
now starting to restore their payouts. "The dividend cycle is
solidly back on the upward track," Silverblatt said in his
report, adding that dividend hikes are broad-based.
The 12 months through March showed 3,154 dividend increases
compared with 2,120 in the prior 12 months, Silverblatt
) andFord Motor (
) doubled their quarterly dividends in the first quarter.Dunkin'
), clothing retailerGap (
) andWal-Mart (
) are also among companies that have boosted their dividends
Silverblatt said the weighted dividend yield fell 19 basis
points to 2.61% in Q1 as stocks rose 10%. But he said yields
remain "relatively attractive" compared with instruments such as
corporate bonds, Treasuries and bank CDs.