Abbott, Northrup, Verizon to raise dividends
Altria Group Inc., AT&T Inc. and Procter & Gamble Co. are among 34 large U.S. companies that are likely to boost dividends, and investors should buy their stocks as the market slumps, according to Goldman Sachs Group Inc.
The shrinking economy has forced 40 companies in the Standard & Poor's 500 Index to slash their dividend this year to conserve cash. Goldman Sachs forecast payout per share by companies in the index will fall 22 percent this year, the biggest decline since 1938.
Dividend growth is "a rare commodity" now, strategist David Kostin wrote in a note to clients today. "Larger firms are more likely to pay dividends."
The 34 companies have an average market value of $33 billion and will increase dividends by an average 12 percent this year and in 2010, Kostin said.
The S&P 500 tumbled 38 percent last year and has fallen 25 percent this year as economic contractions in the U.S., Europe and Japan prompted companies to reduce earnings forecasts.
The following are the companies that Goldman Sachs said may increase their dividends:
Abbott Laboratories (ABT US)
Air Products & Chemicals Inc. (APD US)
Altria Group Inc. (MO US)
AT&T Inc. (T US)
Automatic Data Processing Inc. (ADP US)
Becton Dickinson & Co. (BDX US)
Campbell Soup Co. (CPB US)
Chevron Corp. (CVX US)
Clorox Co. (CLX US)
Darden Restaurants Inc. (DRI US)
Dover Corp. (DOV US)
General Mills Inc. (GIS US)
International Flavors & Fragrances Inc. (IFF US)
Johnson & Johnson (JNJ US)
Kellogg Co. (K US)
Linear Technology Corp. (LLTC US)
Lockheed Martin Corp. (LMT US)
Lorillard Inc. (LO US)
Marathon Oil Corp. (MRO US)
McDonald's Corp. (MCD US)
McGraw-Hill Co. (MHP US)
Northrop Grumman Corp. (NOC US)
Occidental Petroleum Corp. (OXY US)
Parker Hannifin Corp. (PH US)
Philip Morris International Inc. (PM US)
Procter & Gamble Co. (PG US)
Raytheon Co. (RTN US)
Scana Corp. (SCG US)
T. Rowe Price Group Inc. (TROW US)
United Technologies Corp. (UTX US)
Verizon Communications Inc. (VZ US)
Valero Energy Corp. (VLO US)
Wisconsin Energy Corp. (WEC US)
Yum! Brands Inc. (YUM US)