S&P cos hike dividends but overall index rate down

NEW YORK Feb 16 (Reuters) - U.S. corporations have started to increase their dividends again, with 52 companies in the S&P 500 index raising their payouts over a recent period and only two companies cutting their payouts, according to S&P data.

But even with a rising tide of higher dividends, the overall dividend rate of the Standard & Poor's 500 index .SPX is set to fall due to the recent addition of Berkshire Hathaway Inc (BRKa.N)(BRKb.N) to the benchmark index.

The inclusion of Berkshire, the conglomerate controlled by billionaire investor Warren Buffett, will reduce the S&P 500's indicated dividend rate, which will "negate all of the positive good dividend news we've had over the past three months," said Howard Silverblatt, senior index analyst at Standard & Poor's Indexes in New York.

Berkshire, which does not pay a dividend, replaced Burlington Northern Santa Fe Corp in the S&P 500 after buying the No. 2 U.S. railroad company.

The changes in dividend payouts for S&P 500 companies for the period from December 2009 through Feb. 11 compared with 58 dividend increases and 42 decreases for the period from December 2008 to February 2009, S&P said.

The replacement of Burlington Northern by Berkshire will reduce the already-low dividend yield for the S&P 500, lately hovering around 2 percent. The S&P 500 indicated dividend rate will fall by 5 cents for the removal of Burlington, and another 23 cents for the addition of the larger Berkshire.

"Bottom line is that dividends are getting better, but they are not well yet," Silverblatt said in a note. "It will be late 2012 to 2013 until S&P 500 issues pay as much in dividends ($249 billion) as they did in 2008."

In the period from December 2007 to February 2008 there were 106 increases and 10 decreases in dividends, compared with 115 increases and two decreases in the period from December 2006 to February 2007. (Reporting by Ellis Mnyandu; Editing by Leslie Adler)