S&P Indices this week said 444 publicly traded firms increased their dividend payouts in the second quarter, a 32.5% increase from the 335 companies who bolstered shareholders' balances in the year-ago quarter.
For the quarter, companies paid out $11.2 billion, bringing the year-to-date total to more $30 billion -- already $3.5 billion more than $26.5 billion in dividends proffered in all of 2010.
And of the more than 7,000 companies that report dividend information to S&P, only 21% lowered their dividend payment last quarter compared to 34% that reduced their dividend payouts in the second quarter of 2010.
"If dividends were a paycheck, dividend investors would have received an 11.1% raise in the first half of 2011," Howard Silverblatt, senior index analyst at S&P Indices, said in the report. "Dividend increases are commitments not just to current payments but to upcoming obligations. Companies need to be sure that their earnings and cash flow will continue into future periods to satisfy payments."
Silverblatt said yields for paying issues rose 2.51% by the close of the second quarter, up slightly from 2.39% at the end of the first quarter. The percentage of issues paying a dividend was constant in the second quarter, with 39.3% of the issues paying a cash dividend (the same as the first quarter), but up considerably from the 37.9% at year-end 2010.
Perhaps more important, individual investors have saved more than $274 billion on qualified dividend tax cuts in the past seven years -- but there's no guarantee those perks will continue after 2012.
"The two-year extension of the lower dividend tax rate added another $74 billion directly into the hands of investors, with a portion of it going back into the market via reinvestment programs, thereby supporting stock prices," Silverblatt said. "However, the post 2012 tax outlook treatment is very much up in the air, as Washington works out revenue requirements and expenditures."
Silverblatt said he expects to see more dividend increases across all sectors through the remainder of the year, but at a slightly slower pace than investors enjoyed in the first half of the year.
Dividend-hunting investors were quick to jump into Global X Funds' new SuperDividend ETF (Ticker: SDIV) when it made its debut last week. The fund gives investors exposure to 100 companies that rank among the highest dividend yielding stocks in the world.