Dividend Growth Continued in Q3

Dividend payments for U.S. domestic- listed common stocks rose to a record $398 billion in aggregate for the third quarter according to Standard and Poor’s.  Out of roughly 10,000 listed issues there were 439 dividend enhancements, a 25% gain over the same point in 2011.  Fifty three companies cut payments.  There is a bona fide opportunity for dividend growth to continue, as the payout ratio (dividend payments as a percent of earnings) is running in the low 30% range, versus a long term historical average of greater than 50%.  Some notable dividend increases in the third quarter included:

  • Cisco Systems + 75%

  • Norfolk Southern + 6%  (in addition to a 9% increase they made in March equaling 16% year over year)

  • Texas Instruments + 24%

  • McDonalds + 10%

  • Medtronic + 7%

  • Microsoft + 15%

Sources: Standard and Poor’s, Barrons, Martin Capital Partners