U.S. Investors Saved $274 Billion From 2003 On Dividend Tax Cuts

NEW YORK, Oct. 5 /PRNewswire/ -- Standard & Poor's, the world's leading index provider, announced today that of the approximately 7,000 publicly owned companies that report dividend information to Standard & Poor's, only 35 decreased their dividend payment during the third quarter of 2010 marking a continued, dramatic improvement from the 135 that lowered their dividend payment during the third quarter of 2009.

Dividend increases rose 56.4% during the third quarter to 299 from the 191 recorded during the third quarter of 2009.  Year-to-date, 117 have decreased their dividend payment compared to 730 for the corresponding period last year, representing an 84% decline in negative news. 1033 issues have increased their rate so far this year, a 46% gain over the 707 issues that did so last year.

Standard & Poor's also reports that for the third quarter of 2010, the forward net change in the indicated dividend rate increased $5.1 billion, comparing favorably to the $3.0 billion registered in the third quarter of 2009. On a dollar-weighted basis, the first nine months of 2010 saw a net gain in annual dividend rates of $18.5 billion compared to a $45.7 billion decline in rates during the comparable period of 2009.

"With over 1000 issues increasing their dividend rate so far this year, we can comfortably say that the dividend recovery is underway, and with decreases down 84% we can also finally say that the bleeding in dividend cuts has stopped," says Howard Silverblatt, Senior Index Analyst at S&P Indices. "However, investors should take note that the economy is just starting to enter rebuilding mode, and while companies do have record amounts of cash on hand, they face massive uncertainty on everything from commodities to global competition to taxes."

Dividend Tax Cuts

According to Silverblatt, individuals have directly saved $274 billion on the expiring qualified dividend tax cuts from 2003 through the sunset 2010 period. "The substantial increase in dividend taxes will leave investors with significantly less net income; however, even at the higher scheduled tax rate, dividend yields will remain competitive with other instruments. For investors who truly require higher returns, they are going to have to accept additional risk, which runs counter to the basic approach of dividend safety."

Silverblatt expects that the recovery in dividends will continue to be slow and highly contingent upon companies meeting their specific sales and profit targets. He anticipates that it will take until 2013 for the broader dividend market to return to the 2007/2008 levels…"if the economy cooperates."

To download Standard & Poor's Dividend Record, please visit the following web address: www.marketattributes.standardandpoors.com and click on "Dividends". For more information about S&P Indices, please visit www.standardandpoors.com/indices.

About S&P Indices

S&P Indices, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1.25 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit www.standardandpoors.com/indices.

About Standard & Poor's

Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com.

SOURCE Standard & Poor's

Back to top

RELATED LINKS
http://www.standardandpoors.com