Jim Trippon, CPA

We found a report from Bloomberg News regarding dividends to be fairly encouraging for income investors. The report noted that one in six members of the S&P 500 may raise their next dividend while only two percent of the companies in the index appear poised to reduce their next payout.

The Bloomberg report mentioned Dow components AT&T (NYSE: T) and Wal-Mart (NYSE: WMT) and utility Progress Energy (NYSE: PGN) as candidates to boost their next dividends. We previously mentioned AT&T as a potential dividend raiser given its dividend history and due to the fact that rival Verizon (NYSE: VZ) raised its payout earlier this year.

Bloomberg data indicates a total of 79 companies in the S&P 500 could boost their next dividend payment. Dividend stocks continue to make sense as yields on the 10-year Treasury hover around 3.5%. Both AT&T and Progress energy yield more than 6%.

There is a chance that some of the dividend raisers will be those firms that cut or eliminated payouts in 2008 or this year. Thirty-three companies in the S&P 500 had lower payouts this year than they had in 2008, according to the Bloomberg data.

Share buybacks have also been increasing and that's another positive sign, though it would be preferable to see more companies use that cash to raise dividends.

No matter what companies raise their dividends, we view the trend as favorable to income investors and we maintain our stance that a company's cash position and dividend history are critical factors in evaluating the efficacy of future payouts.