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2012 – The Year Of The Dividend
That’s right, 2012 is on track to see the largest dividend payouts of all time and it’s not too late for you to join in on the action!
The New York Times published a piece today, titled, “Dividends Rise In Sign of Recovery” written by columnist Christine Hauser, that has since been syndicated by CNBC.
The article highlights the fact that many DOW favorites such as McDonald’s, Bristol Myers Squibb and Home Depot are continuing their long term trend of rewarding share holders with consistent dividend increases.
In the case of McDonald’s, shareholders saw a 15% increase in the dividend in 2011, keeping alive it’s streak of dividend increases every year since 1976. Bristol Myers Squibb which just announced it’s most recent dividend increase, payable on February 1, 2012, has been paying it’s shareholders every year since 1933 – a 79 year tradition!
If you’ve been following along here at the Daily Dividend Investor for any amount of time you know that almost every day we continue to see company after company increase their dividend payout as the economy slowly, but surely, gains momentum.
The Numbers Look Good
Take a look at the dividends paid by all of the companies listed in the S&P 500 Index. Last year as a whole they paid out $240.6 billion in dividends, compared with $205 Billion in 2010. That’s a year over year increase of $35 Billion or 17%!
Looking back to the peak of the market in 2008, the S&P 500 Index paid out $247 Billion in dividends – not far off from today’s current numbers.
Even The Bad News Is Good
Last year, 101 companies in America decreased or halted their dividend payouts. That is the lowest number of companies reporting negative dividend news since 2006, which approximates the most recent market peak.
- As investors continue to tire of low yielding certificate of deposits (CD’s) and bonds – there will be more buying pressure put on dividend paying stocks – pushing prices upwards.
- Corporate profits continue to rise, which should continue to fuel the streak of dividend increases of the last few years.
- Companies who don’t pay a regular dividend but continue to create massive piles of cash may look to return some of their earnings to restless shareholders. 2012 may be the year we see more technology companies capitulate and begin dividend payments – Apple? (ticker: AAPL) Google? (ticker: GOOG) Dell? (ticker: DELL) Ebay? (ticker: EBAY)
Take Action NOW!
If you’re looking to add an income stream to your portfolio – now may be the time to take action.
It’s quite possible that many of the better yielding dividend stocks may out perform the market this year as investors begin to chase yields. As you begin to look at adding new positions to your portfolio – remember to do your own due diligence – make sure that you are comfortable with any investment you make and that you understand the dynamics of each position.
Best of luck with your investments in 2012 and remember to drop me a line or leave me a comment with your best investment idea for 2012.
Make it a great year – I truly believe that 2012 is The Year Of The Dividend!