With the economy turning around, and an uptick in new jobs created, our friends at Standard & Poor's have just announced that more companies are less likely to cut dividends, and more likely to increase them. In one sense, the news matters to us investors -- but in another, it doesn't.

Standard & Poor's report provides solid confirmation that the worst of this recent recession may be over:

  • Of the 7,000 companies that S&P monitors, only 48 lowered their dividend payouts in the first three months of 2010. That's far better than the 367 that did so a year earlier.
  • Meanwhile, total dividends enjoyed a net increase of $6.4 billion in the first quarter of 2010, versus a $43.8 billion loss a year earlier. Nearly 400 companies increased their dividends in the quarter, up from 283 a year ago.

Here are some of the companies that hiked their dividends in recent months:

Company

Dividend Increase

Dividend Yield
at New Rate

5-Year Dividend
Growth Rate

PepsiCo

7%

2.7%

17.6%

Kimberly-Clark (NYSE: KMB)

10%

4.2%

9.2%

Hershey (NYSE: HSY)

8%

3.0%

7.7%

Time Warner (NYSE: TWX)

13%

2.7%

7.3%

Coca-Cola (NYSE: KO)

7%

3.2%

10.5%

Abbott Labs (NYSE: ABT)

10%

3.3%

8.8%

Data: Motley Fool CAPS.

As evidence that we're not completely out of the woods yet, General Electric (NYSE: GE) also announced a dividend increase -- but it won't happen until 2011. Still, companies such as Starbucks (Nasdaq: SBUX) see no reason to wait -- its management just announced its first-ever dividend, yielding roughly 1.6%.

Why none of this matters
The news from Standard & Poor's, however welcome, is far less crucial than how your own holdings are doing. Even in an environment of widespread dividend cuts, many healthy companies will increase their dividends -- Abbott Labs, for example, has been hiking its dividend for nearly 40 years, through all kinds of market upturns and downturns.

It also shouldn't matter much whether the recession ends this quarter or next, or next year. Long-term investors will benefit when the market surges, and enjoy an unusually large selection of bargains when it tumbles. And if you choose the right stocks, you'll keep enjoying the benefits of dividends through all those ups and downs.

What are your favorite dividend payers? Let us know by leaving a comment below!

Not every company's dividends are perfectly safe. Find out which companies might be the next two dividend blowups.

Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola, PepsiCo, Starbucks, General Electric, and Time Warner. Coca-Cola is a Motley Fool Inside Value recommendation. Starbucks is a Motley Fool Stock Advisor selection. Kimberly-Clark, Coca-Cola, and PepsiCo are Motley Fool Income Investor recommendations. Motley Fool Options has recommended a diagonal call position on PepsiCo. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.