Dividend Drops

Q Do companies reduce their dividends?

— L.N., Hartford, Conn.

A They try hard not to, because it's often seen as a sign of trouble, but sometimes companies have to reduce or eliminate dividends. In our current struggling economy, many companies have done so, including big names such as JPMorgan Chase, Bank of America, General Electric and Toyota.

Many companies (especially young

ones) pay little or no dividend, preferring to reinvest most of their earnings to help themselves grow. For example, Dell, Cisco Systems and Amgen pay no dividend, while Oracle, Hewlett-Packard, MasterCard and CVS Caremark pay modest ones.

But strong dividend-paying stocks can turbocharge your portfolio. In "The Future for Investors" (Crown Business, $27.50), Jeremy Siegel reports that an investment in the 10 highest-yielding of the 100 largest S&P 500 stocks would have returned more than 15.7 percent annually from 1957 to 2003, turning a $10,000 investment into more than $8 million. Compare that with an annual gain of 11.2 percent for the overall S&P 500.

Q Where online can I look up historical price-to-earnings (P/E) ratios?

— C.C., Sacramento, Calif.

A For a company's high and low P/E over the past five years, visit http://caps.fool.com, enter the ticker symbol, click "Search CAPS," and on the stock's main page, click on "Ratios." For more detailed P/E data, visit http:// moneycentral.msn.com/ investor, enter your company's ticker symbol, and click "Get Quote." Then, in this order, click on "Financial Results" (via the blue column on the left), "Key Ratios" and "Ten Year Summary." Sites like these offer all kinds of information. At http://quote.fool.com, you can even order free annual reports.

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