NEW YORK, July 1, 2014 /PRNewswire/ -- S&P Dow Jones Indices announced today that dividend net increases (increases less decreases) rose $12.6 billion during the second quarter of 2014 for U.S. domestic common stock but lagged the $17.6 billion increase seen in the second quarter of 2013 – equating to a 28.3% quarter-over-quarter decrease.

According to S&P Dow Jones Indices, 696 dividend increases were reported during the second quarter of this year compared to the 591 increases which were reported during the second quarter of last year.  For the first half of 2014, 1,774 issues increased their payments, up 15.6% from the 1,535 issues that increased their payments during the first half of 2013.

Of the approximately 10,000 U.S. traded issues, 57 companies decreased dividends (defined as either a decrease or suspension) in Q2 2014 compared to 65 in Q2 2013. The first half of 2014 reported 159 decreases compared to the 204 decreases during the first half of 2013.   

"The good news is that the number of dividend increases was strong again in Q2, as the 696 increases were the most since 1979," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "The bad news is that the growth rate of actual aggregate cash payments has slowed, even as dividends continue to set record payments."

The percentage of non-S&P 500 domestic common issues (ASE, NYSE, NASD) paying a dividend was slightly up at 47.1% from 47.0% in Q1, and slightly down from the 47.3% that paid in Q2 2013. The weighted dividend yield decreased slightly to 2.44% at the end of Q2 from 2.48% at the end Q1.

S&P 500®
Within the large-cap S&P 500, 422 issues (84.4%) currently pay a dividend, the most since September 1998. All 30 members of the Dow Jones Industrial Average™ pay a dividend. Silverblatt found that 66.8% and 50.2% of issues within the S&P MidCap 400 and S&P SmallCap 600 respectively, pay dividends, both up from 66.3% and 49.5% in Q1.  While the index yield for the large-caps is higher than those of the mid and small-caps, the weighted yields for issues paying a dividend are more closely aligned, with small-cap payers yielding more than mid-cap payers.

"The S&P 500 offers a higher yield with a richer history of increases.  However, the income security trade-off is capital appreciation, as the small- and mid-caps have returned significantly more in stock price over the longer five- and ten- year periods," adds Silverblatt.

Sectors
On a sector basis, using the S&P 1500 as the benchmark for U.S. domestic common issues, Silverblatt noted that 88.5% of the Financials sector paid a cash dividend, compared to only 37.2% of the Technology sector. The dividend yields for paying issues were the highest for Telecommunication sector issues, averaging 4.89%, and the lowest for Consumer Discretionary sector issues, at 1.89%. 

Remainder of 2014
According to Silverblatt, based on the first half payment and the current declared dividend rate for the second half of the year, companies, regardless of their index membership, could easily set a record payment for 2014.  "The strong rate of Q2 increases, even at the lower growth rate, coupled with the number of issues that have a demonstrated history of annual increases, translates to another strong increase for dividends in 2014."

"As public companies continue to be pressured to use their available cash, total shareholder returns from both cash dividends and buybacks are at record levels. The trend of higher returns is growing - more companies are paying more dividends and buying back stocks.  At this point, the question is, how much growth will there be, and not will there be growth," remarks Silverblatt.

To download the S&P Indices Dividend Report, please visit www.spdji.com/indices/equity/sp-500 and click on "S&P 500 Monthly Dividend Report" from the "Additional Info" drop down box.

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SOURCE S&P Dow Jones Indices