More companies pay one-time dividends

Fewer U.S. companies raised dividend payments to shareholders in December than in the same month a year earlier, continuing what some analysts say was a shift in 2006 away from higher payouts, particularly at big-name companies.

But some small and midsize companies chose another route to share profit with investors at year-end: one-time, or extra, dividend payments.

A total of 221 companies declared extra dividends in December, up 13% from the 196 companies that paid them a year earlier, data tracker Standard & Poor’s said Thursday. Last month’s total was the highest since 1978, S&P; said.

Companies typically pay extra dividends when they want to reward shareholders but don’t want to commit to paying the same amount each year, said Howard Silverblatt, an analyst at S&P; in New York.

Most companies that pay extra dividends are small- or midsize companies rather than blue-chip firms, he said.

The number of companies that raised their regular dividends in December was 154, down from 166 a year earlier, according to S&P.; For the full year, 1,969 companies raised their regular dividends, up 1% from 1,949 in 2005. By contrast, the number of increases jumped 12% in 2005 from 2004.

Many companies favored using excess cash to buy back stock last year rather than raise dividend payments, S&P; data show.