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Dividend Investors Lost $58 Billion Last Year

By    |   Friday, 08 January 2010 08:54 AM

Investors in dividend stocks had a hard year in 2009, losing $58 billion in dividend payments, according to a new report from Standard & Poor’s.

“It was the worst year ever, no matter how you wish to measure it,” Howard Silverblatt of S&P told The Wall Street Journal.

Eight times as many companies cut dividends in 2009 compared to two years earlier, the highest level since 1955, when the ratings agency first began collecting dividends data. The number of companies cutting dividends hit 804 during the year.

The numbers did in improve slightly in the fourth quarter, however.

Just 74 of the 7,000 companies that report data to the agency cut dividends, far fewer than the 288 who cut dividends a year earlier.

In the same period, nearly 500 companies raised dividends, about the same as the year before.

Silverblatt doesn’t see a recovery in dividends until 2012 or 2013.

"The fourth quarter was in no way a good period for dividends, but compared to recent history it marks a significant improvement, and when added to the stabilization in increases, supports our belief that the worst is over for dividends," Silverblatt said in a statement.

Nevertheless, continuing problems with unemployment would damage stocks, Silverblatt told the Nightly Business Report in an interview.

“I see the biggest threat being unemployment. If we challenge at 10.8 percent, an all-time unemployment high later this year, the consumer confidence would be totally decreased. Housing prices will go down. We'll have additional capital expenditure cuts as well as consumers will pull back. That would be the biggest worry we have at this point in time going forward,” Silverblatt said.

The Labor Department later reported employers cut 85,000 jobs in December, far more than the 8,000 job drop some analysts had expected. The unemployment rate thus stayed at 10 percent.

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