Many Firms Forgoing Dividend Increases

The threat of recession is driving corporate managers to sharply restrict their dividend generosity with shareholders, in an effort to conserve cash. Only 56 companies raised their dividends in September, the lowest tally since October, 1971, Standard & Poor’s reported Monday. S&P; tracks dividend actions by thousands of companies. The 56 dividend increases in September compares to 81 increases in September, 1989, and an average of 113 in the first eight months of this year.

S&P; now estimates that only 1,300 dividend hikes will be tallied this year, down more than 20% from 1989 and the lowest figure since 1971, when President Nixon proposed that companies voluntarily restrict dividends in the war on inflation.