Pace of Dividend Increases Slows
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More companies raised dividend payments in February than a year earlier, but the pace of improvement in the trend slowed from recent months, Standard & Poor’s said Monday.
A total of 158 companies boosted their cash dividend payments, up from 151 in February 2002, S&P; said. That was the seventh year-over-year increase in eight months, but it was less impressive than in January, when 197 companies raised dividends compared with 170 a year earlier.
From 1997 to 2001 fewer companies raised dividends each year, in part because corporate managers favored stock buybacks over dividends. The dividend trend turned last year, which analysts said reflected a rebound in corporate earnings and pressure by some shareholders for bigger cash payments as stock prices overall fell for a third year.
President Bush’s proposal in January to eliminate taxation of dividends is expected to continue to drive more companies to increase dividends, analysts say.
-- Tom Petruno
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