Dividends Are Rising

Dividend-paying stocks are much more appealing. A widespread recovery is under way among companies that throw off cash to shareholders. Since January, 136 companies in the Standard & Poor’s 500-stock index have either increased their payouts or initiated new dividends, collectively bolstering payments by $11 billion this year.

This year’s moves have put only a “dent into last year’s devastation,” noted Howard Silverblatt, senior index analyst at S.& P., in a recent report. He added that it might take years for the market to fully recover from the dividend damage. But over all, the resumption of dividend payments can be seen as a sign of improved financial strength and confidence. “Usually, boards of directors won’t declare dividends or certainly won’t increase them if they feel that the companies need those resources for other purposes,” said Robert Zagunis, chairman of the investment committee at Jensen Investment Management in Lake Oswego, Ore.

Source: New York Times

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