“Dividend investors hit the trifecta in 2010,” said S&P’s senior index analyst, Howard Silverblatt, and he argued conditions are set for an even better year in 2011. Specifically, in 2010, dividend increases were up 45%, decreases declined 82% and the forward indicated dividend rate (the estimated dividend companies will pay in the next year based on what they’re paying now) increased over 8%, which suggests a stronger year for dividend income in 2011, said Silverblatt.
On a dollar basis, companies in 2010 added $26.5 billion to dividends. The year before, they had reduced dividend payouts by $42.4 billion. One way to think about dividend income, is as your salary. “In 2010, you saw an 8.5% increase,” Silverblatt said. “This year, I think, you’ll see a 9% increase but you are still down 18% from where you were in 2008.” He added that dividend increases won’t return to their 2007-2008 levels until 2013 and, only then, “if the economy cooperates.
Source: MarketWatch
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