The great parlor game about if and when the United States might ever, ever lose its long-held triple-A credit rating was given a new momentum when Standard & Poor’s Rating Service adopted a negative outlook toward the United Kingdom’s top credit rating.
Calling it a parlor game might be making light of a serious issue: how massive U.S. government stimulus spending and financial bailout efforts, in addition to hefty payouts for defense, health and other priorities, are jeopardizing the fully assumed safety in U.S. obligations that’s existed as long as most people now alive can remember.
But since S&P talked about the U.K., not the U.S., and might never even change its triple-A on the U.K., chatter about a U.S. downgrade still falls into the category of idle speculation. But it is fascinating speculation.
Here’s something we haven’t seen much of over the past year – a financial services company that raised its dividend rather than cut it. Unum Group did just that today, increasing the payout by 10%. Now, the new dividend isn’t huge – it becomes 8.25 cents per share – but it does reflect a company that has stayed the course and continues to make money. It recently reported it made $164.9 million in the first quarter versus $163.1 million in the year-ago quarter. And that’s even after writing down $57 million in investment-related losses. Those losses come from investments in a media conglomerate, a specialty chemical company that went bankrupt and an auto-parts supplier. Unum is a provider of employee benefits and disability insurance.
