Dividends Make a Come Back

This year through mid-June, there were at least 135 dividend increases or initiations among the companies in the Standard & Poor's 500-stock index, up roughly 55% from the first six months of last year. And the gains are coming across a broad swath of industries. Chip maker Analog Devices Inc. in May said it would increase its quarterly payout 10%, to 22 cents a share. Dental-products provider Patterson Cos. in March announced it would initiate a quarterly payout of 10 cents a share. And on Thursday, Best Buy Co. announced it will raise its dividend by 7%, to 15 cents a share.

If the economy continues to gather strength, analysts say, many more companies will likely gain the confidence to boost dividends this year. So what has changed? Corporate balance sheets, which were squeezed during the recession, are once again brimming with cash. S&P 500 nonfinancial companies had a record $837 billion in cash at the end of the first quarter, up from $665 billion a year earlier, according to S&P.

Source: Wall Street Journal

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