Dividend Increases Slowing Slightly – Who Cares?

wysockiman over at the Motley Fool discussion boards posted this article from the LA Times in the Dividend Growth Investing forum (use BugMeNot if you don’t want to sign up):

Cash Dividend Hikes Flatten
By Tom Petruno, Times Staff Writer

U.S. companies in the third quarter turned cautious about raising cash dividend payments to shareholders, after a strong pace of increases in the first half, data tracker Standard & Poor’s said Monday.

A total of 391 companies boosted their dividends in the quarter, the same number as in the third quarter of 2004.

By contrast, 1,055 companies raised dividends in the first half of this year, up 18% from the first half of 2004.

Corporate America generally has become more generous with dividends since the federal income tax rate on dividend income was slashed in 2003. Also, rising earnings have given more companies the wherewithal to boost payouts to shareholders.

Joseph Lisanti, editor of S&P’s Outlook investment newsletter, said it was “too soon to say that the trend toward higher dividend payments is being reversed.”

But he said the third-quarter data indicated that some companies were taking a more cautious approach on dividends.

Companies tend to become more conservative about raising dividends when they fear that their earnings growth is slowing, which could limit their ability to maintain higher payouts.

Interesting read but it doesn’t say much and I am not going to change my course because of it (or most newspaper articles for that matter). Careful what you take away from these articles – you may never invest at all!

Technorati : dividend increase, dividend increases, dividends

• Increasing Payout Ratio on Banks
• High Dividend Payout Ratio = High Earnings Growth Rate
• Digging Into the Payout Ratio
• Best Dividend Stock Investing Posts of the Week – May 22, 2010
• 2 Things Investors Don’t Want in a Dividend Stock (Plus 1 Controversial One)