Dividends: On the Rise Again?

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New York-based Citigroup, which paid 32 cents a share, discontinued its dividend this year. Bank of America reduced its quarterly payment to 1 cent a share from as much as 64 cents last year.

"The biggest payers out there were the financials," Shacknofsky said. "So in dollar terms, dividends are still weak."

Share Buybacks

Companies are also beginning to use cash from rebounding profits to buy back stock. Chubb Corp., the insurer of commercial property and high-end homes, approved a repurchase program this week of 25 million shares.

General Dynamics (GD), the producer of Abrams battle tanks and Gulfstream business jets, this week announced plans to buy back as many as 10 million shares. The Falls Church, Virginia-based company is forecast by Bloomberg to raise its dividend in March by 2 cents to 40 cents a share. Spokesman Rob Doolittle declined to comment.

Shacknofsky said companies should be raising dividends instead of buying back shares. "They should leave playing the market to investors, and they should rather give cash back as dividends," he said.

Select companies such asCoca-Cola (KO) and Walmart have held up well during the recession and maintained dividend increases, Crawford said. Those companies are a safe haven during this period of low interest rates and slow recovery.

"That's why AT&T and Progress and some of these names are attractive," Crawford said. "You are just as safe and you're better off because you have higher yield."

The Bloomberg dividend data is based on seven criteria including a company’s guidance, dividend history, regression analysis, and put-call parity. It had had an accuracy rate of 87% for dividend forecasts for the U.S., Europe and Asia in the third quarter, compared with 61% for market analysts.

To contact the reporter on this story: Thomas Black in Monterrey at tblack@bloomberg.net.

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