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C dividend, or not

Posted by: Howard Silverblatt on November 24, 2008

News is still breaking regarding C, with some reports of a restricted dividend rate. Currently C has a $0.64 annual rate ($0.16 quarterly). Its last dividend went Ex-div on 10/30 and is payable Friday, 11/26. AIG was in a similar situation when it obtained financing (dividend declared, past ex-date, with pay date upcoming) and was permitted to pay its 9/19 $0.22 dividend.

C started the year as the 3rd largest dividend payer, $10.78B, and reduced its rate in Jan ($2.16 to $1.28) and Sep ($0.64). It closed Friday as the 14th largest payer ($3.48B), yielding 17%. Each $0.01 C dividend payment is equal to $0.006232 S&P 500 dividend; therefore, their current $0.64 rate has a $0.40 impact on the index dividend, or 1.45% (4.27% as of 12/2007) of the total payment. As of the close of Friday, the S&P 500 indicated dividend rate was $27.16, with the indicated yield being 3.39%, and the average paying (376) issue yielding 5.01%.

There has been 50 dividend cuts YTD, amounting to $-34.4B, with Financial issues accounting for 41 of them, and $-31.8B. S&P will monitor the situation for additional information.

The 2008 S&P 500 dividend payment is estimated to be $28.05, vs. $27.73 for 2007
The Q4,’08 over Q4,’07 dividend payment is expected to decline 10% - the worst quarterly change since 1958
2009 estimate is under review

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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