Category Archives: dividends

Dividends by the Numbers in June 2021 and 2021-Q2

Going by the U.S. stock market's dividends, both June 2021 and the second quarter of 2021 registered robust growth.

The following chart shows the market's dividend increases and decreases from January 2004 through June 2021:

Number of Public U.S. Firms Increasing or Decreasing their Dividends Each Month, January 2004 through June 2021

Here is the U.S. stock market's dividend metadata for June 2021:

  • 2,723 U.S. firms declared dividends in June 2021, an increase of 870 over the total recorded in May 2021. That figure is also a decrease of 1,294 from the 4,017 recorded in June 2020.
  • Some 59 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in June 2021, an increase of 12 over the number recorded in May 2021 and an increase of 46 over the 13 recorded in June 2020.
  • Standard and Poor counted 81 U.S. firms announcing dividend rises in June 2021, a decline of 67 from the 148 recorded in May 2021, and an increase of 7 over the 74 recorded in June 2020. The reduction from May 2021 was expected, because of the seasonal pattern where June is typically the month that records the second-lowest number of dividend increases during the year. The month that typically sees the fewest dividend increases is September.
  • A total of 6 publicly traded companies cut their dividends in June 2021, the same as the number recorded in May 2021 and also a decrease of 65 from the 71 recorded in June 2020. With so few dividend cuts during the month, we're going to omit listing them, but will note that most occurred with firms who pay variable dividends. Overall, the low total for the month is consistent with robust economic growth.
  • One U.S. firm omitted paying their dividend in June 2021, an increase of one over the zero firms that suspended paying their dividends in May 2021. That figure is also a decrease of 26 from the 27 recorded in June 2020.

Looking at the quarterly data, with just 28 dividend cuts, 2021-Q2 saw 31 fewer dividend reductions than the first quarter of 2021, confirming the continuing improvement for the U.S. economy.

Speaking of which, for 2021-Q2, 384 firms increased their dividends, down 242 from 2021-Q1 when many firms turned their dividends back on or raised them as the U.S. economy continued gaining strength after exiting the coronavirus recession. Although the National Bureau of Economic Research will be the final arbiter for determining when that recession ended, the dividend metadata suggests that event occurred during 2020-Q3.

Reference

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 1 July 2021.

Dividends by the Numbers for May 2021

May 2021 continued the strong environment of the last few months for the U.S. stock market's dividend payers.

The easiest way we've found to measure the relative health of the U.S. stock market is to simply count the number of dividend cuts each month. Since 2012, with the arrival of a large number of variable dividend payers, we've found that if the number of dividend cuts and omissions is below 50 per month, the business environment for the firms listed on the U.S. stock market can be considered relatively healthy. If the monthly number of dividend cut declarations rises above 50, that's a very good indication that recessionary conditions are present within the U.S. economy. We can then can identify which industries are seeing the most distress during those periods by seeing which companies are announcing dividend cuts.

With that threshold in mind, we're now seeing perhaps the strongest environment for dividend paying stocks in the last 10 years, as defined by the relative absence of dividend cuts.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 - May 2021

Here's the rest of May 2021's dividend metadata, complete with comparison to April 2021 and the year-over-year change from May 2020, which marked the bottom of the coronavirus recession for dividend cuts.

  • 1,853 U.S. firms declared dividends in May 2021, a decline of 166 from the 2,019 recorded in April 2021. That figure is also a decrease of 1,265 from the 3,118 recorded in May 2020.
  • Some 47 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in May 2021, an increase of 8 over the number recorded in April 2021 and an increase of 25 over the 22 recorded in May 2020.
  • Standard and Poor counted 148 U.S. firms announcing dividend rises in May 2021, a decline of 7 from the 155 recorded in April 2021, and an increase of 83 over the 65 recorded in May 2020.
  • A total of 6 publicly traded companies cut their dividends in May 2021, a decline of 10 from the 16 recorded in April 2021 and also a decrease of 108 from the 114 recorded in May 2020.
  • One U.S. firm omitted paying their dividends in May 2021, the same as the number recorded in April 2021. That figure is also a decrease of 152 from the 152 recorded in May 2020.

Our sampling of dividend cuts from our real-time sources of dividend declarations for May 2021 captured 67% of all the cuts announced during the month. Which is to say four of the six:

We note that two of the four in our sample are oil royalty trusts that pay variable dividends from month to month, which falls well within the typical level of noise we see for these firms during periods of relative health for the U.S. economy. In this case, that comparative health is driven mainly by the lifting of coronavirus pandemic lockdown mandates in much of the country.

Update 6 June 2021: A reader alerts us the article reporting a 75% dividend cut for Mosaic (also linked above) is in error. We've confirmed that Mosaic increased its regular dividend from its previous level of $0.050 per share to $0.075 per share in June 2021.

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 28 May 2021.

Seeking Alpha Market Currents. Filtered for Dividends. [Online Database].

Wall Street Journal. Dividend Declarations. [Online Database when searched on the Internet Archive].

Dividends by the Numbers for April 2021

April 2021 marks an unusually strong month for dividend paying firms in the U.S. stock market, which is especially true if you look at year-over-year comparisons. Let's get straight to the month's dividend metadata:

  • 2,019 U.S. firms declared dividends in April 2021, a decline of 1,160 from the 3,179 recorded in March 2021. That figure is also a decrease of 1,073 from the 3,092 recorded in April 2020. This is the second-lowest figure on record, falling only behind January 2021's record low of 1,466.
  • Some 39 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in April 2021, a decline of 26 from the 65 recorded in March 2021 and an increase of 28 over the 11 recorded in April 2020.
  • 155 U.S. firms announced they would boost cash dividend payments to shareholders in April 2021, a decline of 11 from the 166 recorded in March 2021, but a year-over-year increase of 102 over the 53 recorded in April 2020.
  • A total of 16 publicly traded companies cut their dividends in April 2021, an increase of 3 over the number recorded in March 2021. It is also a decrease of 104 from the 120 recorded a year ago in April 2020.
  • Zero companies omitted paying their dividends in April 2021, a decline of one from March 2021. By comparison, the figure for April 2020 was 155. That's the difference between an economy plunging into a recession because of pandemic fears and government-imposed lockdowns and one finally emerging from both.

The following chart shows the monthly number of dividend rises and falls from January 2004 through April 2021.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 - April 2021

The number of dividend cutting firms is perhaps the simplest economic indicator for the U.S. economy, where April 2021's figures are consistent with a rebounding economy.

Our sampling of dividend cuts from our real-time sources of dividend declarations for April 2021 counted just four dividend cuts during the month. Of these, three involve firms that pay variable dividends to their shareholders, which is well within the range we would expect for typical month-to-month noise for these firms. The fourth is a retail-oriented real estate investsment trust (REIT), Weingarten Realty Investors (NYSE: WRI), which is merging with Kimco Realty (NYSE: KIM). Its dividend cut reflects a final partial-month payout to WRI shareholders, whose shares are being converted into shares of Kimco Realty.

Here's the very, very short list of dividend cuts in April 2021:

The following chart reveals how the measure of cumulative dividend cuts and suspensions by day of quarter to date for 2021-Q2 compares with the second quarters of 2018, 2019, and 2020. Pay close attention to the difference between 2020, when companies were slashing dividends in response to the coronavirus recession, and 2021.

Cumulative Number of Dividend Cuts in U.S. by Day of Quarter, 2018Q2 vs 2019Q2 vs 2020Q2 vs 2021Q2 (QTD) as of 30 April 2021

The vertical scale on the chart is set to capture dividend cuts in the U.S. stock market during a "typical" recession. 2020's Coronavirus Recession was anything but typical.

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 30 April 2021.

Seeking Alpha Market Currents. Filtered for Dividends. [Online Database].

Wall Street Journal. Dividend Declarations. [Online Database when searched on the Internet Archive].

Visualizing Historic Yields for the S&P 500

Ever since we put the S&P 500 at your fingertips, we've explored a lot of different ways to visualize that treasure trove of U.S. stock market data as represented by the S&P 500 (Index: SPX).

But until today, we've never presented the historic yields for the index. The following chart fills that gap in our visualizations of the S&P 500's data, showing the index' monthly trailing year earnings yield and its trailing year dividend yield from January 1871 through March 2021:

Historic Yields for the S&P 500, January 1871 - March 2021

As a general rule, dividends have represented anywhere from half to two-thirds of the earnings of S&P 500 companies.

Both the S&P 500's earnings and dividend yields have fallen over time, with the most significant downward shift occurring in the 1990s. This shift coincides with the arrival of the Dot Com Bubble and the modern era of the Federal Reserve's monetary policies, which have set U.S. interest rates on a long term falling trend.

Those long term trends are punctuated by periodic spikes in the data. Spikes in either data series tend to indicate crashing stock prices rather than surging earnings or dividends.

If you would like to sample the raw data behind these values, our S&P 500 At Your Fingertips tool can provide you with the values of the S&P 500 or its predecessor indices, their trailing year earnings per share, and their trailing year dividends per share for any month from January 1871 through the last month.

Dividends by the Numbers in March 2021

Going by the number of dividend cuts announced during the month, the U.S. stock market continued to show signs of a robust recovery in March 2021.

But there's more to assessing the market than just counting up the number of dividend cuts. Let's run through the U.S. stock market's dividend metadata to get a more complete picture.

  • A total of 3,179 U.S. firms declared dividends in March 2021, an increase of 740 over the number recorded in February 2021. That figure is also a decrease of 690 from the 3,869 recorded in March 2020.
  • 65 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in March 2021, an increase of one over the number recorded in February 2021 and an increase of 41 over the 24 recorded in March 2020.
  • 166 U.S. firms announced they would boost cash dividend payments to shareholders in March 2021, a decline of 120 from the 286 recorded in February 2021, and an increase of 32 over the 134 recorded in March 2020.
  • A total of 13 publicly traded companies cut their dividends in March 2021, a decline of one from the 14 recorded in February 2021 and also a decrease of 40 from the 53 recorded in March 2020.
  • One U.S. firm omitted paying their dividends in March 2021, the same as the number recorded in February 2021. That figure is also a decrease of 22 from the 23 recorded in March 2020.

Most of these numbers indicate the continuation of a strong recovery. Only the number of dividend declarations suggests the U.S. stock market remains relatively subdued below pre-coronavirus recession levels.

The following chart shows the number of dividend increases and decreases announced each month from January 2004 through March 2021.

Number of U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 - March 2021

The next chart compares the cumulative number of dividend cuts and suspensions recorded throughout each day of 2021-Q1 against the three previous first quarters:

Cumulative Dividend Cuts and Suspensions in U.S. by Day of Quarter, 2018Q1 vs 2019Q1 vs 2020Q1 vs 2021Q1

This chart reflects the aftermath of the coronavirus recession on the U.S. stock market. 2020 saw the number of dividend cuts and omissions soar in response to the pandemic and the combination of state and local government lockdowns that crippled much of the economy. Now, with Operation Warp Speed's vaccines and the lifting of government-imposed restrictions on businesses in much of the U.S., few U.S. firms have needed to announce dividend cuts.

That doesn't mean the economy was entirely free from distress during the quarter. Here's the very short list of dividend cuts we saw in our near real-time sampling for March 2021.

Each of these firms can trace the current distress behind their announced dividend cuts to some aspect of the coronavirus recession. While the first three represent something of a delayed response to 2020's coronavirus recession, the second three are in response to the new lockdowns being imposed by national governments in the Eurozone in 2021. That's because as variable dividend payers, the dividends of oil royalty trusts like these firms are very sensitive to changes in global oil prices. Here, the reduction in demand resulting from Eurozone lockdown measures means falling oil prices, which in turn, has meant dividend cuts for these firms.

Variable dividend payers can be like the proverbial canaries in the coal mine, which is why we pay attention to them. Sometimes, they just contribute noise. But other times, as now, they pick up on an underlying signals which makes them well worth watching.

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 31 March 2021.