Dividend Stock Forecast Starting To Look A Tad Better
Dividend Forecast Starting To Look A Tad Better
About: (S&P 500, Bloomberg, Dividend Genius)
We recently discussed a report from Bloomberg News that noted one in six members of the S&P 500 may raise their next dividend while only two percent of the companies in the index appear poised to reduce their next payout. The report said 79 members of the S&P 500 could raise their next scheduled dividend payment. To add to that good news, Standard & Poor’s is estimating dividend payouts in the S&P 500 will rise 6% in 2010 to $23.67 a share in 2010.
That’s certainly welcome news for wary income investors that have seen many of Wall Street’s most reliable payouts either suspended or eliminated over the past two years. The reality is 2010 probably couldn’t be any worse on the dividend front than 2008 and 2009 have been. Seventy-eight S&P 500 members have cut their dividends this year, depriving investors of $48 billion in payouts. Those reductions tempered the 147 dividend increases that added $9.5 billion to shareholders wallets. The S&P 500 dividend payout for 2009 should be $22.31 a share.
In 2008, 62 S&P 500 constituents either cut or eliminated their payouts, reducing shareholder payments by $40.6 billion. The 241 increases in 2008 that accounted for $19.1 billion could not make up the difference. Unfortunately, it’s obvious that dividend cuts are often deeper and more painful than dividend increases.
The historical dividend growth rate for the S&P 500 is 5.6%, so it’s going to take a while to recoup the losses of the past two years, but even small steps in the right direction will be appreciated. Of course, more dividend cuts are probably on the way, but recent action regarding dividend increases may be a sign that the dividend storm has passed.
