Firms Hiking Dividends Is on Increase Again

The number of companies raising dividend payments to shareholders was up nearly 22% in May from a year earlier, resuming the upward trend that began the year, Standard & Poor’s said Monday.

With the tax reform act that Congress passed late last month -- reducing the maximum tax rate on dividend income to 15% from 38.6% -- Wall Street is expecting more companies to raise their cash payouts to investors.

Companies “are going to have to address” the idea of bigger dividends, said Howard Silverblatt, an S&P; analyst in New York.

The data firm said 106 companies raised their dividends last month, up from 87 in May 2002. The upward dividend trend was strong in January and February, then halted in March and April, when increases lagged year-earlier totals, according to S&P.;

Even without the tax-rate cut, more firms would be expected to boost dividends this year because corporate earnings have been rebounding, analysts say.