Increasing Number of Firms Hike Dividends

More companies may be getting religion about the appeal of cash dividend payments to shareholders amid the worst decline in stock prices in a generation.

Standard & Poor’s said Thursday that 131 companies raised their cash dividend payments in July, up from 100 a year earlier and up from 87 in June.

The year-over-year change in the number of companies boosting dividends was one of the largest in the last few years.

The trend since 1999 had been for companies to be stingier with dividends, as corporate profits declined. The number of dividend increases fell from 1,701 in 1999 to 1,496 in 2000 and 1,326 in 2001, S&P; data show. But in the first seven months of this year 878 firms raised dividend payments, up from 864 in the same period of 2001.

At the same time, the number of companies cutting or omitting dividends fell to 85 in the first seven months, down from 109 in the 2001 period, S&P; said.

Some firms may be opting to share more of their profit directly with stockholders, via dividends, as earnings rebound. Second-quarter earnings for the S&P; 500 list of companies are expected to show the first year-over-year increase since the fourth quarter of 2000.

Other firms may be trying to reward shareholders who’ve suffered through the plunge in stock prices over the last 28 months.

Companies that raised quarterly dividends in July included Irvine-based Fidelity National Financial, which raised its payment from 10 cents a share to 12 cents; chemical firm Rohm & Haas, which raises its payment from 20 cents to 21 cents; and drug giant Merck, which boosted its dividend from 35 cents to 36 cents.

SEC Moves to Fill Oversight Board Seats

The Securities and Exchange Commission on Thursday began the formal process of filling the new accounting industry oversight board. The SEC said it is looking for “persons of the highest integrity” to serve on the board, which was created by the landmark corporate reform bill signed Tuesday by President Bush.

The law directs the SEC to appoint the board’s five members within 90 days, and requires them to serve full-time. Two of the five must be certified public accountants. The agency, in its release, didn’t list what compensation will be for board members.

The SEC asks for submission of names by Sept. 2 to Bert Merher, Office of the Chief Accountant, 450 5th Street NW, Washington, D.C. 20549.

Reuters

Briefly

Merrill Lynch & Co. Chairman David Komansky, speaking at a business round table Thursday, said the brokerage eventually will expense stock options awarded to its executives, but that the firm continues to study the issue. Pressure is growing on corporate America to deduct the cost of options from earnings.