This certainly helps build the case for changing the mentality of Silicon Valley, where leadership has historically been cautious with their cash. And like the late Apple CEO Steve Jobs, who resisted giving dividends, tech companies would rather save cash for possible acquisitions and other investments. In a way, raising dividends might actually signal companies aren't planning enough for future growth. Such arguments become less convincing during economic environments like today's, since cash reserves keep rising and aren't likely returning much for companies at a time when interest rates are at record lows.
To be fair, companies have started relaxing their purse strings. During the first three months this year, net dividend increased by 27.6% to $24.2 billion over the same period during the previous year, Standard & Poor's reported Tuesday. There were 677 dividend increases during the first quarter, a 32% rise compared with the 510 increases during the same period in 2011.
"Dividends had another great quarter, with actual cash payments increasing over 11% and the forward indicated dividend rate reaching a new all-time high, with or without Apple," said Howard Silverblatt, S&P Indices' senior index analyst in a statement.
To be sure, he adds, payout rates remain historically low. The percentage of net income paid out in dividends, which historically averages 52%, remains near its lows at under 30%.
It remains to be seen where dividends go this year, but thus far they're off to a good start. Perhaps a small boost in consumer spending will come next.
