Shareholders Ask: Where Are the Dividends?

Pressure is building for companies to raise dividends as they amass record cash stockpiles. “Why are they sitting on all this cash, earning close to zero, when they could at least be putting it in the hands of shareholders?” asks Michael A. Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston.

The average yield for companies in the Standard & Poor’s 500-stock index was 2.31 percent as of Oct. 4, the highest since November 2009. Even so, dividends paid to shareholders represented only 27 percent of earnings in the second quarter, down from 30 percent in 2008 and below a 30-year average of 41 percent, according to Wells Fargo. Meanwhile, companies’ cash, cash equivalents, and short-term marketable securities jumped 63 percent, to $2.77 trillion, in the same period, according to Bloomberg data.