Dividend Payers: You're Getting More, But...

Dividend payers: you're getting more, but it's still not much.

Just got off the phone with the good folks at Standard and Poor's. The topic: dividends in 2012.

Good news: they were good. Bad news: they weren't nearly as good as they could have been.

(Read more: S&P Retreats From 5-Year High Ahead of Earnings)

Here's the simple facts: last year was good for dividends. Total cash payout for the S&P 500 was up 18 percent. A little over 400 of the 500 companies in the S&P (80 percent) paid a dividend. (Read more: Stronger Economy, Not Fed, Driving Stocks: Pros)

That's the good news. Now the bad news: the payout rate (paid dividends/GAAP earnings) is still shockingly low at 36 percent, well below the historic average of 52 percent.

Why so low?

Well, the short answer is because companies don't have to pay any more...more specifically,investors are not DEMANDING that they pay more. Those companies paying dividends in the S&P 500 (about 80% of the S&P) paid an average dividend yield of 2.6 percent. That's pretty good: investors don't have a lot of other choices: the 10-year Treasury, for example, is yielding 1.9 percent.

The companies don't have to pay out more, and they don't want to because they are still not sure what is going to happen in 2013.



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