Standard & Poor's has confirmed what a lot of investors already knew all too well: 2009 was a dividend annus horribilis for U.S. stocks.
The world's leading stock-index provider reported Thursday that U.S.-traded common stocks booked 804 dividend cuts last year, against 1,191 increases - a ratio of 1.48 increases for each cut. It said the year had both the least number of increase and the most decreases since it began collecting such data in 1955.
How does the 1.48 ratio compare with recent years? During the bull market of the mid-2000s, dividend hikes routinely outpaced cuts by 20 to 30 times. We've come a long, long way down.
"Worse than the lack of increases in 2009 was the devastating dividend cuts," said Howard Silverblatt, senior index analyst at S&P, in a news release. "The cuts were extremely deep, costing investors $58-billion [U.S.]in income."
At least there are signs that things have started to turn around, though.
In the fourth quarter, 74 stocks cut their dividends against 484 increases - a ratio of 6.84, well above the 1.65 posted in the 2008 fourth quarter. It's still pretty thin, but it's a start.
"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," Mr. Silverblatt said.
"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 2008."