Thursday, January 7, 2010 0 comments ++[ CLICK TO COMMENT ]++

S&P: Dividend rebound to be slow

I took a deep look at dividends about an year ago and the situation didn't look too good back then. The economies of the world have been rebounding since then but S&P is projecting a slow recovery for dividends. From The Globe & Mail:

Last year marked the worst on record for stock dividends, but this year is expected to show steady improvement, Standard & Poor's said today. Howard Silverblatt, the senior index analyst at S&P Indices, said in a statement today that 2009 saw the fewest dividend increases and most decreases since S&P began tracking the data in 1955...

“Standard & Poor's believes that the dividend recovery will be slow, and that it will take until 2012 to 2013 to return to where we were in 2007 and 200.”

Since companies are very conservative with their dividend schemes, I think S&P's projection seems reasonable. Dividends shouldn't have much difficulty reaching the 2007 levels in 2 or 3 years from now.

Overall, dividend-oriented investors who grew up in the 80's and 90's will find the next 10 years very slow and unrewarding. Almost a sure 7% to 10% raise in dividends, as was the case with many blue chip companies in the last 30 years, will be a thing of the past.


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