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Within the S&P 500, 32 issues have increased their rate in January compared to 27 in January of 2003. These increases will result in a 10.7% increase in 2004 payments over 2003. January and February are traditionally the busiest months for dividend increases, prior to most annual reports and shareholders meetings.
"For 2004 we see growth in both sales (5%) and operating earnings (13%) assisting the current trend of increasing dividends," said Howard Silverblatt, equity market analyst, Standard & Poor's. "With only 369 issues paying a dividend compared to 469 in 1980, there is significant room for growth and additional issues to initiate dividend payments."
Standard & Poor's Silverblatt noted that dividend increases continued to be dominated by financial companies, representing 11 of the 32 increases. Also notable was the continuation of positive dividend activity from Information Technology companies with 3 increasing their payments.
The announced dividend payout amounts were significant: the average increase was 21.0%, the median was 12.5% and three issues doubled their payments. This compares with an average increase last year of 11.3%.
"With 36% of the S&P 500 held directly by individual investors, the net increase after the new tax rate for the January increases will puts an additional $1.13 billion into the hands of investors," noted Silverblatt.
Standard & Poor's also released findings on S&P 500 DividendAristocrats, or companies that have increased their actual dividend payments in each of the last 25 years. Eight of the 57 S&P 500 DividendAristocrats increased their rates in January. The full list of DividendAristocrats and the current indicated dividend rate can be found on www.indices.standardandpoors.com.
A company's dividend payment history and dividend paying prospects are not factors that are considered by Standard & Poor's in identifying companies for inclusion in or exclusion from an S&P index.
