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Second Quarter 2013 Dividends Increase by $17.6B
NEW YORK -- Dividend net increases (increases less decreases) rose $17.6 billion during the second quarter for domestic common stocks. Nearly 600 dividend increases were reported during the quarter, equating to a 17% gain over the 505 reported during second quarter of 2012.
Of the 10,000 or so U.S. traded issues, 65 companies decreased dividends in the second quarter compared to 37 in the second quarter of 2012, according to a report from S&P Dow Jones Indices. For the first half, there were 1535 dividends that remained the same or increased and 204 were the payout decreased or was suspended compared to 1,182 of the former and 68 of the latter during first half of 2012.
"Dividends continued to increase in the second quarter with actual cash payments increasing 15.5% and the forward indicated dividend setting another all-time high," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. "Payout rates, which historically average 52%, continue to remain near their lows at 36%. At this point, year-to-date dividend payments are up 13.9%, with 2013 easily expected to surpass the 2012 record dividend payment."
The percentage of non-S&P 500 domestic common issues (ASE, NYSE, NASD) paying a dividend continued to increase, reaching 47.3% in the second quarter, up from 46.1% in the first and 43.8% in the second quarter of 2012. The paying issues in the large-cap S&P 500 reached 82%, a level last seen in September 1999. All 30 members of the Dow Jones Industrial Average pay a dividend.
Silverblatt determined that the weighted dividend yield was 2.65% at the end of the second quarter, a slight increase from the 2.61% at the end of the first quarter and down from 2.8% at year-end 2012. "The higher yield is statistically insignificant, [because] the increase in dividends kept pace with the increase in second-quarter stock prices," he said in a prepared statement. "Dividend yields continued to be competitive relative to other instruments such as corporate bonds, treasuries, and bank CDs."
Silverblatt continues to see positive indicators for dividends, including earnings coverage and record-high cash levels. "The dividend cycle continues on the upward track, with both investors and companies viewing them positively," he said. "Growth in the second half should be less than the first half [because of] the large December 2012 payout spurred by tax concerns."
Published by The Business Journal, Youngstown, Ohio.
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