"With an increased payout of $6.4 billion, individuals will directly get an additional $2.0B after taxes," said Howard Silverblatt, equity market analyst. "We are estimating that 2004 will set a record payment of over $180B, versus the $161B payout in 2003, more than double the $95B paid out 10 years ago in 1994."
Dividend Increases Escalate: 28% year-to-date increase
Each of the four months for 2004 has seen an increase in the number of issues raising their dividends over 2003 increases. To date, 110 issues have increased their rate compared to 86 at this time in 2003 (27.9%). Additionally, only four have lowered their rate (3 reduced and 1 suspension) compared to 11 (7 reductions and 4 suspension) last year (-63.6%). The average increase is 23.8%. Splits are up, with 11 year-to-date compared to 14 for all of 2003 though 2003 was an atypical year (the average per year since 1980 is 60). Actual cash payments are also up 16% year-to-date and will set a new record for 2004.
Dividend paying stocks outperformed non-payers for the third month in a row. Year-to-date payers have averaged 1.99% compared to loss of 1.48% for non-payers. 373 issues now pay dividends versus 370 at year-end 2003, 351 at year-end 2002 and 454 at year-end 1983.
"Given the expected increases in sales, earnings availability of cash, as well as public pressure and governance issues, we expect increases to continue to grow along with the number of S&P 500 companies paying a dividend," said Silverblatt.
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