document: Dividends are back in vogue on Wall Street NEW YORK • Big companies increased their dividends by a record amount in the first quarter . Since the start of the year , 117 companies in the Standard & Poor 's 500 index said they would raise or start paying dividends . The value of the new and raised annual dividends announced by these companies amounted to a record $ 16.6 billion , according to Howard Silverblatt , senior index analyst at S&P . Just 78 companies raised their dividends in the same period a year ago . The surge in dividends reflects a turning point in the long recovery from the financial meltdown in 2008 . After the meltdown many companies slashed or eliminated their dividends and , like many Americans , put their cash in the bank and sat on it . As a result , U.S. companies have amassed a record $ 940 billion in cash . But now the economy is recovering , profits are rising and investors are demanding something for their patience . An easy way to keep shareholders happy is to restore or raise dividends . Even companies that have long resisted dividends are instituting them . Cisco Systems Inc. said it would begin paying shareholders $ 1.3 billion per year , a record amount for a first-time dividend payer in the S&P 500 . '' `` The fact that dividends are increasing is a clear signal that the economy and businesses worldwide are on a much firmer footing than a few years ago , '' '' said Kent Croft , the manager of the $ 421 million Croft Value Fund . Financial companies announced they would raise annual dividends by $ 7 billion , accounting for 42 percent of all S&P 500 dividend increases . JPMorgan Chase & Co. is quintupling its annual dividend to $ 1 a share from 20 cents , amounting to an increase of $ 3.1 billion . The value of the payout is a record for an S&P 500 company . The increased dividends came after the Federal Reserve announced March 18 it would allow some banks to raise dividends if they passed certain '' `` stress tests . '' '' JPMorgan , Wells Fargo & Co. and State Street were among those that increased their dividends for the first time since the financial crisis . Citigroup Inc. reinstated its dividend . Ten S&P 500 companies announced in the first quarter that they would begin paying dividends . That 's the most for any three-month period since at least 2003 , when Silverblatt began collecting data . Besides Cisco , discount department store Kohl 's and health benefits company WellPoint also became first-time dividend payers . Besides financials , industrial companies and businesses focused on consumer products announced the most dividend increases during the quarter . Among those raising their dividends : cruise operator Carnival Corp. , retailer Limited Brands and manufacturer Eaton Corp. . But even the strong recovery in dividends has n't made up for all the losses . With the increases , quarterly dividends by companies in the S&P 500 are 13 percent lower than their peak in 2008 . Some companies that have raised their dividends still pay far less than before the recession . That is particularly true for banks and other financial services companies . Their dividend yield , which measures how much cash is being paid per share , runs about 1.41 percent today , far below the 3.32 percent yield in 2007 . '' `` Companies are paying more dividends , but they are also taking it slow , '' '' Silverblatt says . '' `` Dividends are far from being completely back . '' ''
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