The number of S&P 500 companies now paying dividends hit 402 this year, the highest since December 1999, as more corporations reacted to improving markets, according to S&P Dow Jones Indices. The payout from those companies is also expected to reach an all-time high.

"As the market gets better, companies start paying," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. According to his numbers, the number of dividend payers has not breached the 400 mark since the end of 1999.

The companies that initiated dividends this year include Apple, which in March declared a $2.65 quarterly dividend yielding 1.8%, SAIC, whose dividend is $0.12, yielding 3.6%, and AES, with a $0.04 dividend yielding 1.3%. In total, 12 companies have announced they would begin paying regular cash dividends this year.

The amount of money paid out as dividends is expected to hit a record $275 billion in 2012, up from $241 billion in 2011, and 11% more than the previous high of $248 billion in 2008.

Silverblatt said that companies are catering to shareholders looking for yield, as the low interest rate environment is keeping yields low for most asset classes. "You don't have a lot of places to go if you're looking for a dividend," he said.

David Fuller's view In the audio above, Vipal Monga of the WSJ says that S&P 500 companies will be paying out a record, at least in nominal terms, of approximately $275 billion in cash dividends this year.

Moreover, companies with strong balance sheets in other countries are also increasing dividends. Fortunately for investors, we no longer hear that cynical line from the 1990s that 'dividends are an inefficient use of capital.'

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