On Friday, Standard & Poor's announced that 138 of the approximately 7,000 publicly owned companies decreased their dividend during the third quarter of 2008, representing a 557% increase from the 21 issues that decreased their dividend during the third quarter of 2007.
Reported dividend increases fell 21.2% to 346 from 439 reported in the third quarter of 2007.
It was the worst September for dividends since we started keeping dividend records in 1956
. During the second quarter, companies were nervous and cautious. The third quarter, however, saw many companies deciding to take action, and that action took $22.5 billionout of the pockets of investors.
Financial issues accounted for about two-thirds of the dividend cuts and 93% of the dollar damage during the third quarter. Also, no longer is it just blue chip companies cutting dividends. Many of the issues are now much smaller, and more regional. The problem has trickled down.
Silverblatt concluded by noting that many issues are still increasing their dividend rate despite the massive number of dividend cuts.
However, given the uncertainty of the markets and the economy, these companies have to be extremely confident of their future earnings and cash flow.
You can download Standard & Poor's Dividend Record, at the following web address: www.marketattributes.standardandpoors.com and click on "Dividends."