Dividend Actions Not as Bad as News Suggests

Standard & Poor's maintains a monthly dividend action report on thousands of publicly traded firms. For the 12-month period ending July 31, 2008, S&P reported the number of increases declined 17.4% on a year over year basis. As detailed in the chart below, the number of firms that increased their dividend for this 12-month period totaled 1,601 versus 1,938 increases for the 12-months ending July 31, 2007.

(click on chart for larger image)

Although increases have declined by a relatively large percentage, the number of dividend declarations for the 12-months ending July 31, 2008 are only down 1.5% to 35,422 versus 35,950 declarations for the 12-months that ended July 31, 2007.

 

Further, comparing the July, 2008 declarations to the July, 2006 declarations (two years earlier) shows dividends declared are up 1.8% (35,422 versus 34,788). And finally, the July 2008 total represents an increase of 5.9% over the total 33,430 achieved in 2005.

 

(click on chart for larger image)

In spite of the tough dividend increase period over the last 12-months, the number of companies declaring dividends continue to trend higher on a longer term basis. That is not to say one should not pay attention to the near term dividend activity, but it is important to look at both the near and long term picture.

Comments

[notsosmart:]

check out FRO.they just declared a$3.00 div.as i understand the ceo gets no pay just div. income.i have no connection to wall st or this firm except as a happy shareholder.

2008 Aug 29 08:32 AM

[Liebs:]

With a 190% payout ratio how long do you think that dividend on FRO will last? Fredriksen is the Chairman, CEO, President AND a Director and he's got his 24 year old daughter listed as a director too. I don't know a lot about the company but that all seems a little fishy to me. Seems like he's paying himself handsomely (probably better than getting a paycheck) at the expense of shareholders. And he doesn't have to report it either...

2008 Aug 29 11:32 AM

[notsosmart:]

you mean he cant be trusted like the enron or world com ceo's.the div. has paid for my stock.how manypeople can claim that.LOL

2008 Aug 29 02:43 PM

[notsosmart:]

ps-if im getting $3.00 @ share do i care that he & his daughter are paid handsomely.how many ceo's get handsome pay & shareholders get nothing.ever hear of the corp. jet going to pick up the family dog to bring him to the vacation place cause the family missed him?you think you really know whats going on?

2008 Aug 29 03:47 PM