S&P 500 firms cutting dividends

Dividend payments by companies in the Standard & Poor's 500 index may fall 10 percent this quarter, the biggest quarterly decline since 1958, as bank failures and slowing economic growth stifle payouts, S&P said yesterday.

The New York rating firm also cut its estimated 2008 dividend from all S&P 500 companies to $28.05 from $28.85, representing the slowest annual growth since 2001, according to a statement.

Financial companies in the index reduced their payouts 35 times in 2008, almost triple the number of the last five years combined, said Howard Silverblatt, the senior index analyst at S&P.

"We're seeing an enormous amount of cuts," Silverblatt said. "There is a lot of pressure on dividends, and a lot of [companies] are concerned about their cash flow."

The S&P 500 index is down about 35 percent so far this year as global mortgage-related losses topped $660 billion and central banks were forced to pump more than $2 trillion into rescuing financial markets from collapse.

Bank of America Corp., Lennar Corp., and Principal Financial Group Inc. cut their dividends 50 percent or more this month.

There are, however, some exceptions. Goodrich Corp., the maker of aircraft landing gear and a member of the S&P 500, yesterday raised its quarterly dividend 2.5 cents a share to 25 cents.

"This increase," chief executive officer Marshall Larsen said in a statement, "reflects the continued financial strength of our company, and our strong positioning on the newer, more fuel-efficient aircraft around the world."