2008 May Not be a Good Year for Dividends
With the economy heading for a possible recession and corporate earning and profits falling, there is less cash to distribute to shareholders. Despite the risk of cutting dividends on stock’s image, firms have already started doing so this year:
This year, companies in the S&P 500 have decreased or killed their dividends a record nine times, S&P says. Nextel is the fourth company, after insurer Progressive, (PRG) bank Sovereign Bancorp (SOV) and bond insurer MBIA, (MBI) to eliminate their dividends this year. That’s up from just two dividend cuts or suspensions in the same time period last year.