NEW YORK - Even though stock market performance was lackluster last year, recording a 1.32% total return, 1,826 companies increased their dividends - the most in any year since 1983, according to Standard & Poor's Corp., New York.
Fifty-two companies resumed paying dividends.
Dividend cuts were "uncommonly rare" during the year, it noted. Only 59 companies decreased their dividends, and 77 omitted them. The combined total 136 unfavorable actions was the lowest since S&P began keeping records in 1956.
For 1995, S&P forecasts at least 2,000 companies will increase dividends.
In 1993, 1,635 companies increased dividends and 75 companies resumed paying dividends, while 87 companies cut dividends and 106 companies omitted dividends.
"The expanding economy and strong gains in corporate profit were the main reason for the dividend improvement last year," said Arnold Kaufman, editor of The Outlook, S&P's weekly investment advisory newsletter.
"Indeed, in view of the many double-digit earnings gains indicated for 1994, it was something of a surprise that the number of dividend increases didn't show an even larger rise from the 1993 level."
Mr. Kaufman was cautious about the dividends paid on S&P 500 stocks. These dividends were up on average only 4.7%, to $13.18 last year from $12.58 in 1993 - far below the average 6% annual increase during the index's 66-year history. He said the S&P 500 dividend rate was hurt by special problems of the three traditionally large-dividend paying groups - electric utilities, pharmaceuticals and telephone companies.
But for 1995, he expects an above-average 7% growth in dividends for the S&P 500 stocks.
Although final figures aren't in yet, he said the corporate payout ratio, the part of profits paid out in dividends, shrank in 1994 for two reasons. Companies used cash for new plant and equipment expansion and also for stock repurchase programs.
