Financial companies are a big portion of the problems currently plaguing the stock market and most of these problems are a direct result of the seemly endless bad decisions made by overaggressive financial institutions continuing to leverage their assets more and more.  As a result, stocks within the S&P500 Index classified as financial stocks have been one of the worst performing sectors over the past couple years.  During this time frame, we have seen several household name banks and financial institutions go broke or be forced to sell to competitors to avoid bankruptcy themselves.

However, interestingly enough, the dividends being paid by many financial stocks haven't followed the dismal performance of the stocks themselves.  Of the 500 stocks currently within the S&P 500 Index, 81 of these stocks are classified within the financial sector.  For my analysis, I took what the annualized 4th quarter 2008 dividend payment was for each company and compared it to what the annualized 4th quarter 2007 dividend payment was.  The results were rather surprising when compared to how the financial stocks have performed over this time frame, losing close to 50% of their respective values as a whole.

Total # of Financial Stocks Within the S&P500 Index	81
Financial Stocks (S&P500) Increasing Dividend from 2007 to 2008	35
Financial Stocks (S&P500) Decreasing Dividend from 2007 to 2008	23
Financial Stocks (S&P500) With No Change in Dividend from 2007 to 2008	18
Financial Stocks (S&P500) Not Paying a Dividend in 2007 or 2008	5

It seems a bit odd to me that 50% more financial stocks increased their dividend from the end of 2007 to the end of 2008.  Sure, there are still some very solid companies within the financial sector that have a good balance sheet and adequate cash flow to be able to increase a dividend, but to have 50% more stocks within the financial sector increase dividends rather than lower dividends, is way out of line, especially considering the industry is in such dire straits.  Either one of two things is happening in my mind: Things aren't nearly as bad as everyone thinks they are or we are in store for a lot more dividend cuts in 2009.  Of course, another government bailout could skew things a little, but I would imagine any companies receiving taxpayer's money will be very limited in the amount of dividends they can pay to shareholders.  Time will tell how the year eventually plays out for these financial stocks, but in the meantime buckle up as volatility is likely to remain very high.

Here is a chart showing the financial stocks that increased their dividend as well as ones that lowered their dividend from the end of 2007 to the end of 2008.  As I mentioned above, each year's respective dividend is the annualized rate of the 4th quarter dividend payment.

Dividend Increases:

Stock	Symbol	2007 Dividend	2008 Dividend	Additional Notes from 2009
AFLAC, Inc.	AFL	$0.82	$0.96	Increased to $1.12
Allstate Corporation	ALL	$1.52	$1.64
American Express	AXP	$0.60	$0.72
Ameriprise Financial	AMP	$0.60	$0.68
Apt. Investment & Mgmt.	AIV	$1.63	$2.40	Dividend Varies, Estimate
Assurant, Inc.	AIZ	$0.48	$0.56
Avalon Bay Communities	AVB	$3.40	$3.57
BB&T Corporation	BBT	$1.84	$1.88
Capital One Financial	COF	$0.11	$1.50
Charles Schwab	SCHW	$0.20	$0.24
Chubb Corporation	CB	$1.16	$1.32
Cincinnati Financial	CINF	$1.42	$1.56
CME Group, Inc.	CME	$3.44	$4.60
Equity Residential	EQR	$1.85	$1.93
Federated Investors, Inc.	FII	$0.84	$0.96
Franklin Resources	BEN	$0.80	$0.84
HCP, Inc.	HCP	$1.78	$1.82	Increased to $1.84
Health Care REIT, Inc.	HCN	$2.64	$2.72
Hudson City Bancorp	HCBK	$0.34	$0.52	Increased to $0.56
Kimco Realty	KIM	$1.60	$1.76
Lincoln National	LNC	$1.58	$1.66	Decreased to $0.84
Marsh & McLennan	MMC	$0.76	$0.80
Marshall & Ilsley Corporation	MI	$1.24	$1.28
Moody's Corporation	MCO	$0.32	$0.40
NYSE Euronext	NYX	$1.00	$1.20
Peoples United Financial	PBCT	$0.53	$0.60
PNC Financial Services	PNC	$2.52	$2.64
ProLogis	PLD	$1.84	$2.07
Public Storage	PSA	$2.00	$2.20
Simon Property Group	SPG	$3.36	$3.60
State Street Corporation	STT	$0.92	$0.96
Torchmark Corporation	TMK	$0.52	$0.56
Travelers Companies, Inc.	TRV	$1.16	$1.20
Vornado Realty Trust	VNO	$3.60	$3.80
Wells Fargo	WFC	$1.24	$1.36

Dividend Decreases:

Stock	Symbol	2007 Dividend	2008 Dividend	Additional Notes from 2009
American Capital, Ltd.	ACAS	$4.00	$0.00
American International Group	AIG	$0.80	$0.00
Bank of America	BAC	$2.56	$1.28	Decreased to $0.04
CIT Group	CIT	$1.00	$0.40	Decreased to $0.08
Citigroup, Inc.	C	$2.16	$0.64	Decreased to $0.04
Comerica, Inc.	CMA	$2.56	$1.32	Decreased to $0.20
Developers Diversified Realty	DDR	$2.64	$0.00
Fifth Third Bancorp	FITB	$1.76	$0.04
First Horizon National	FHN	$1.72	$0.80
Hartford Financial Services	HIG	$2.12	$1.28
Host Hotels & Resorts	HST	$0.80	$0.20
Huntington Bancshares	HBAN	$1.06	$0.53	Decreased to $0.04
Invesco Ltd.	IVZ	$0.77*	$0.40	Adj. for 1 for 2 Reverse Split
Keycorp	KEY	$1.46	$0.25
Leucadia National Corp.	LUK	$0.25	$0.00
MBIA, Inc.	MBI	$1.36	$0.00
Principal Financial Group	PFG	$0.90	$0.45
Progressive Corporation	PGR	$2.00	$0.15	Dividend Eliminated
Prudential Financial	PRU	$1.15	$0.58
Regions Financial Corp.	RF	$1.52	$0.40
Sun Trust Banks	STI	$2.92	$2.16
XL Capital	XL	$1.52	$0.76
Zions Bancorp	ZION	$1.72	$1.28	Decreased to $0.16

The Own Every Stock blog is brought to you by 1Stock1, home of the Yearly Stock Returns Index and the Stock Performance Guide.