More S&P; Firms Start Dividend Payouts

Companies in the Standard & Poor’s 500 index, spurred by the federal cut in tax rates on dividends, are initiating payouts this year at the fastest pace since at least 1980.

Sixteen companies in the index have announced that they would start paying dividends, including six in July, S&P; data show.

In addition, scores of firms that have been paying dividends raised them this year.

Among the big-name companies that announced initial dividends in July were gaming firm Harrah’s Entertainment Inc. and radio station owner Clear Channel Communications Inc.

Congress in May approved President Bush’s plan to reduce the maximum tax rate on dividend income to 15% from 38.6%.

Lower taxes provide “a big encouragement to invest in stocks,” said Ian Rogers, who helps invest $6 billion at Strong Capital Management in Menomonee Falls, Wis.

Annualized dividend yields on many stocks are low by historical standards -- in the 1% to 2% range. But that still is far above yields on short-term savings vehicles, such as money market mutual funds.

The average simple yield on taxable money funds was 0.53% this week, according to fund tracker Imoneynet Inc.

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Initial dividend payers

Here are some of the companies that this year have announced their first cash dividend payments.

*--* Initial Thursday Div dividend stock yield Company (quarterly) close (annualized) Harrah’s Entertainment $0.40 $43.65 2.7% Mandalay Resort Group $0.23 $34.76 2.6% Station Casinos $0.125 $29.00 1.7% Intl. Game Technology $0.075 $25.45 1.2% Federated Department Stores $0.125 $40.01 1.2% Goody’s Family Clothing $0.02 $8.28 1.0% Clear Channel Communications $0.10 $40.95 1.0% CDW Corp $0.075 47.88 0.6% S&P; 500 index $990.31 1.6%

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Source: Bloomberg News, Times research