Countless studies demonstrate that dividend-paying stocks outperform non-payers by a wide margin. From 1972 to 2006 dividend-paying stocks returned an average of 10% annually versus 4% for non-dividend payers, according to Ned Davis Research. Going back to 1926, other studies confirm almost half of the S&P 500’s return was due to the dividends paid by the companies in the index.

So, I’ll take Bill Gross’ recommendation one step further. Forget now. Dividend-paying stocks ALWAYS deserve a place in your portfolio.

Yet, in this market, it’s increasingly difficult to find reliable dividend stocks.

“This is going to be the worst [dividend-cutting year] in 50 years,” Howard Silverblatt, Senior Index Analyst at Standard & Poor’s, predicted in January. So far he’s right with industry titans like General Electric and Dow Chemical announcing cuts.

Keep in mind, Dow Chemical maintained or increased its dividend every year since 1912. That means conditions this year are worse for the company

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The number of companies reducing dividends in Q1 hadn't been reached since S&P started keeping such data in 1955.

 

In the first quarter of 2009, the number of U.S. companies decreasing dividends surpassed the amount of increases at a record rate, according to data compiled by Standard & Poor's index services group.

In fact, the number of companies reducing dividends in the opening three months of the year hadn't been reached since S&P started keeping such data in 1955, says Howard Silverblatt, the firm's senior index analyst.

"The mammoth $77 billion reduction in dividend payments during the first quarter is eye popping. The full impact of these cuts will be felt this quarter, when the dividend check is sent in the mail," he said in a statement on Tuesday releasing the latest figures.

Out of some 7,000 public companies tracked by S&P, a record 367 dropped dividend payments in

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Corporate Profits Might Be Falling, But Don’t Let Yours…

The Oxford Portfolio Update – January 22, 2009 (Broadcast #842)
by Louis Basenese, Oxford Club Senior Analyst

Forget the four-day rally for the S&P 500. Or the fact that it traded above its 50-day moving average yesterday for the first time in weeks. Unless you’re a technician, these feats hold little value.

What matters instead, is what’s going on at the company level. And two headwinds exist that can’t be overlooked.

First, companies keep cutting dividends. At the fastest pace in 50 years, no less, according to Howard Silverblatt, Senior Index Analyst at S&P. Already this year, seven companies in the Standard & Poor’s 500 index have decreased their dividends, wiping out roughly $12 billion in payments investors were banking on.

Second, only 45% of U.S. companies have beat earnings estimates. That’s even more pathetic when you consider how dramatically analysts have

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Corporate pension plans have been pummeled by the broad slump in equity and commodity markets. After ending 2007 will a surplus of $60 billion, S&P500 companies now have a combined deficit of around $300 billion.

This from the Guardian (UK):

Investors should start seeing the effect on year-end balance sheets, and reforms under the Pension Protection Act of 2006 are likely to complicate matters by forcing companies to spend cash to shore up their plans. “If your pension plan was invested mainly in equities and equities are off 20 percent, all of a sudden you have a 20 percent shortfall,” William Hernandez, chief financial officer of paint maker PPG Industries Inc , told Reuters in an interview earlier this month. “It is going to force a huge number of companies into making large contributions next year, at the worst possible time,” he added. Companies in the Standard & Poor’s 500 index <.SPX> are on their ...

In the depths of a bear market that has carved between $500 billion and $2 trillion from U.S. retirement accounts so far this year, as many as two-thirds of all Americans have stopped contributing to their retirement plans, a new study shows. And that’s precisely the wrong decision to make at the wrong time. No matter how poorly the financial markets are performing, saving for retirement has to remain a top priority. “It’s not a time for people to stop contributing,” Diane Young, director of retirement and goal planning at TD Ameritrade Holding Corp. (AMTD), the Omaha, Neb.-based brokerage firm that conducted the retirement study, said in an interview with Bloomberg News. “Because time is money, it’s important to stay on track.” According to the Ameritrade study – released yesterday (Tuesday) – 63% of Americans have ...

Dividend investors have a right to be worried at the moment. Not only are stock indexes plummeting, but a large number of firms are also slashing their payments to shareholders. Many are even discontinuing their dividends altogether. But there are still plenty of bright spots. In fact, a great many companies continue INCREASING their dividends despite all the dire forecasts. More on them in a moment. First, let’s get the bad news out of the way: Out of the 500 companies in Standard & Poor’s flagship U.S. stock market index, 30 companies have cut their dividends so far this year. Another 11 have completely suspended payments (or the companies themselves have ceased to exist). Total damage to investors: $31.74 billion in missed dividends. As you’d guess, most of the pain ...

Some 23 different companies have been deleted in the blue chip benchmark since June alone as the credit crisis takes its toll.

 

 

The S&P 500 is set to add another exchange to its blue chip index. After the close of trading on Tuesday, the Nasdaq OMX Group Inc. will replace department store chain Dillard's Inc., which has occupied the blue chip benchmark's last spot.

The shift follows the addition of Comstock Resources Inc., an oil and natural gas producer, to the S&P MidCap 400 index. It replaced Entercom Communications Corp., a radio broadcaster that was listed as the benchmark's 400th largest company based on market-cap size when the move was made last week.

Also, the S&P SmallCap 600 index has made two changes within the past week. One of those involved replacing wireless tech provider EMS Technologies with Radio One Inc.  At the same time, Integral Systems Inc. was added and Fleetwood Enterprises, which makes recreational vehicles, fell out of the benchmark.

This

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Some 23 different companies have been deleted in the blue chip benchmark since June alone, as the credit crisis takes its toll.

 

The S&P 500 is set to add another exchange to its blue chip index. After the close of trading on Tuesday, the NASDAQ OMX Group Inc. will replace department store chain Dillard's Inc., which has occupied the blue chip benchmark's last spot.

The shift follows the addition of Comstock Resources Inc., an oil and natural gas producer, to the S&P MidCap 400 index. It replaced Entercom Communications Corp., a radio broadcaster that was listed as the benchmark's 400th largest company based on market-cap size when the move was made last week.

Also, the S&P SmallCap 600 index has made two changes within the past week. One of those involved replacing wireless tech provider EMS Technologies with Radio One Inc.  At the same time, Integral Systems Inc. was added

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