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DIVIDENDS PAID BY THE COMPANIES IN THE S&P 500 INDEX could plummet 10% in the fourth quarter -- the biggest drop in 50 years.

The chief culprits are bank failures and the depressed economy. Standard & Poor's said Tuesday that there had been 35 dividend cuts and omissions by financial corporations this year, for an aggregate decrease in payouts of $31 billion. In comparison, there were only a dozen reduced or omitted disbursements, totaling just $3.1 billion, in the previous five years.

The firm now expects S&P 500 companies to pay a combined $28.05 in 2008 dividends, down from $28.85. Nevertheless, the lower figure represents a 1.2% increase from 2007's $27.73, notes Howard Silverblatt, S&P's senior index analyst, and that translates into an aggregate payout of $244.7 billion this year. But that 1.2% increase would be the lowest since 2001, when payments fell 3.3% as the Internet bubble burst.

There are also tax implications stemming from all these dividend cuts.

"The insult to injury...may come next January," said Silverblatt, "when investors find out that since their company didn't make any money, [it] didn't pay any U.S. federal income taxes." Consequently, he explains, the payouts those investors received won't represent qualified dividend income, meaning they'll be taxed at the rate of 35%, instead of 15%.

Silverblatt did find a bright side, sort of. "Since dividend investors usually hold on to their stocks for decades, many of them will still show a gain over the decades...if the company is still around."

EVEN AS THE STOCK MARKET took a 500-point dive Wednesday, Goodrich (GR) brightened investors' dreary day a bit with an 11% dividend enrichment.

Under its former moniker B.F. Goodrich, the company was one of the world's largest tire and rubber manufacturers, but it sold that business to Michelin in 1988. Now a $7 billion global supplier of aerospace, defense and homeland-security products, Charlotte, N.C.-based Goodrich voted a new quarterly on its common of 25 cents a share, versus 22.5 cents.

This is Goodrich's second consecutive annual boost. Uninterrupted dividends date back to 1939. Disbursement will take place Jan. 2 to stockholders of record Dec. 1. The ex-dividend date is Nov. 26. Yield: 3.12%.

Chief Executive Marshall O. Larsen commented that "this increase reflects the continued financial strength of our company and our strong positioning on the newer, more fuel-efficient aircraft around the world."

Bucking the negative trend of third-quarter earnings reports, Goodrich posted a 32% jump in profits, to $168 million, or $1.33 a share, from $127 million, or 99 cents (including an 11-cent divestiture loss), in the corresponding 2007 stretch. That topped analysts' consensus estimate of $1.13 a share, according to a survey done by Thomson Reuters. Sales rose 11%, to $1.77 billion from $1.6 billion; analysts had forecast $1.81 billion.

Those more fuel-efficient planes have enabled Goodrich "to grow our commercial aftermarket at rates consistently faster than the overall capacity in the global airline system," Larsen said. He added that the company expects to be able to sustain that trend.

Goodrich also raised its full-year 2008 earnings outlook for a third time. It now projects $4.90 to $5 a share, versus July's prediction of $4.80 to $4.95. It earned $3.89 a share in 2007.

However, the company lowered its sales view by $200 million, to $7.1 billion, because of the strike at Boeing (BA). Goodrich said that its current outlook assumes that the labor disruption will end in late October or early November.

From a 52-week Big Board high of 75.74 Dec. 11, the stock was recently quoted at 32 and change. During the third quarter, Goodrich repurchased some two million of its common shares. It has about $246 million remaining in its buyback program.