S&P Dow Jones Indices announced today that dividend net increases (increases less decreases) were $12.0 billion in the second quarter of 2012, setting what is believed to be a new record dividend payout in aggregate dollars for U.S. domestic listed common stock issues.  S&P Dow Jones Indices reported 505 dividend increases during the second quarter of this year, a 13.7% gain over the 444 increases reported during the second quarter of 2011. Thirty-seven companies, of the approximately 10,000 U.S. traded issues, decreased their dividend in the second quarter of this year compared to 21 this time last year.

"Dividends had another great quarter, with actual cash payments increasing over 14% and the forward indicated dividend rate reaching a new all-time high," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "Payout rates, which historically average 52%, remained near their lows, at 31%. At this point, we expect to see double-digit growth in actual dividend payments for the remainder of 2012, which would equate to a 16% gain over 2011."

The percentage of non-S&P 500 common issues (ASE, NYSE, NASD) paying a dividend increased to 42.7% in the second quarter up from 41.7% in the first quarter and 41.4% at the end of the fourth quarter of 2011. Silverblatt also determined that yields for paying issues increased to 2.77% at the end of the second quarter, from 2.58% at the end of the first quarter. The yield change was the result of both increased dividends and lower second quarter prices. "Yields remain relatively high, with the quarterly yield increase due to a combination of higher dividends and the 4% price decline," notes Silverblatt.

Additionally, Silverblatt reports that individual investors will have saved $358 billion on qualified dividend tax cuts from 2003 through the 2012 expiration date. "At this point taxes are the main concern for dividends. Under current legislation, taxes on dividends to individuals almost triples in 2013, going from 15% to 43.4%. From a planning perspective, this will force corporations to examine their return to shareholders policy, potentially pull back on dividend increases and increase share buybacks. From an individual investor's prospective, the risk-return ratio shifts significantly since you would now be keeping less than 57 cents on the dollar compared to the current 85 cents," adds Silverblatt.

Looking ahead, Silverblatt is seeing many positive signs for dividends. "Dividends are back in style with investors looking for yields during a time when companies can afford to give more and want to satisfy shareholders -- all of which makes for a very positive outlook for dividends."