U.S. Companies Add $9.6 Billion to Dividend Payments in Third Quarter

NEW YORK, Oct. 5, 2011 /PRNewswire/ -- S&P Indices announced today that dividend increases rose 17.1% during the third quarter of 2011, with 350 issues increasing their dividends versus the 299 that did so during the third quarter of 2010. Of the approximately 7,000 publicly owned companies that report dividend information, only 23 decreased their dividend payment during the third quarter of 2011 versus 35 this time last year.

"Dividends continue to battle back, adding 14.5% to their indicated rate this year, but still 6.8% shy of their all-time June 2008 high," says Howard Silverblatt, Senior Index Analyst at S&P Indices. "Payout rates, which historically average 52%, remain near their lows at under 30%, with strong cash-flow giving companies considerable room to increase payments. Part of the reason for the low payouts appears to be the uncertainty over the economy, which prevents companies from making long-term dividend commitments."

Silverblatt determined that yields for paying issues increased to 2.99% at the end of the third quarter, compared to 2.51% at the end of the second quarter and 2.39% at the end of the first quarter. "The relatively higher yields are attractive to income investors who currently have few alternatives," notes Silverblatt.

The percentage of issues paying a dividend inched up in the third quarter, with 40.0% of the issues paying a cash dividend. This figure is up slightly from the 39.3% which paid a dividend during the first and second quarters, and the 37.9% which paid at year-end 2010.

Additionally, Silverblatt reports that individual investors have saved $274 billion on qualified dividend tax cuts from 2003 through 2010. "The two-year extension of the lower dividend tax rate added another $74 billion directly into the hands of investors, with a portion of it going back into the market via reinvestment programs, thereby supporting stock prices. However, as Washington works through revenue requirements and expenditures, the post 2012 tax outlook treatment is very much in play."

For the remainder of 2011, Silverblatt expects to see more dividend increases across all sectors, with few decreases. "We expect to see dividend increases continue across the board for all sectors during the fourth quarter of 2011, on pace with what we saw during the third quarter. While there is concern over the economy, we don't expect it to be enough to cause companies to significantly delay or reduce their dividend plans in the final quarter of the year."

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

* The above estimates assume levels of direct S&P 500 ownership and dividend qualifications based on historical data. The assumptions for non-S&P 500 are based on broader indicators and not as well documented

About S&P Indices

S&P Indices, a leading brand of the McGraw-Hill Companies (NYSE:MHP), 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.

SOURCE Standard & Poor's