Sept. dividend payouts lowest for 3Q in 50 years

[October 04, 2008]  NEW YORK (AP) -- Dividend cuts in the third quarter took $22.5 billion out of the pockets of investors during what one Standard & Poor's analyst called the worst September for dividends in more than 50 years.

Of the 7,000 or so publicly traded companies that report dividend information to S&P, 138 decreased their dividend during the third quarter of 2008 compared to 21 during the third quarter of 2007.

That marks the worst September for dividends since S&P started keeping such records in 1956, said senior index analyst Howard Silverblatt.

"During the second quarter, companies were nervous and cautious," Silverblatt said in a statement. "The third quarter, however, saw many companies deciding to take action, and that action took $22.5 billion out of the pockets of investors."

Reported dividend increases fell 21 percent to 346 from 439 reported in the third quarter of 2007, S&P said.

Silverblatt said financial issues accounted for about two-thirds of the dividend cuts and 93 percent of the dollar damage.

"Also, no longer is it just blue chip companies cutting dividends. Many of the issues are now much smaller, and more regional," he added. "The problem has trickled down."

Silverblatt noted that many issues are still increasing their dividend rate despite the numerous dividend cuts.

"However, given the uncertainty of the markets and the economy, these companies have to be extremely confident of their future earnings and cash flow," he said.

[Associated Press]

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