Worst quarter for dividends in 52 years

(NEW YORK) As if slumping stock prices weren't bad enough, investors had to swallow stingier payouts in the worst quarter for dividends since 1956, Standard & Poor's said on Wednesday.

The number of US companies that cut dividends rose by more than five-fold in the final quarter of 2008 while the number of companies raising their payouts fell by 40 per cent, according to the Standard & Poor's Dividend Record.

And an S&P senior analyst warned that the worst has yet to be seen.

S&P said that of the nearly 7,000 public companies that report dividend information to its Dividend Record, 288 decreased their dividend, up from the 52 issues that did so during the fourth quarter of 2007, while 475 companies increased their dividend compared with 792 a year earlier.

Forty-seven companies in the S&P 500 slashed payouts by a total of US$40.6 billion as dividend payments for the whole index fell 6.1 per cent from a year earlier.

Among them was Citigroup, the embattled No. 2 US bank, which cut its dividend to a penny per share from 16 cents in exchange for a US government-sponsored bailout in late November.
'Due to the timing of the cuts many issues actually paid in the fourth quarter, so the full impact of the cuts won't be felt until the first quarter of 2009,' said Howard Silverblatt, senior index analyst at S&P.

'Dividend increases continued to fall, and given the heightened uncertainty and change in spending habits, companies will be wary of any increases,' he added.

The total number of positive dividend actions in 2008 was 1,874, the lowest since the 1,756 recorded in 2002. -- Reuters