Category Archives: dividends

Dividends by the Numbers in September 2022 and 2022-Q3

The third quarter of 2022 saw the U.S. stock market's dividend paying stocks turn in another mixed performance. The following chart visualizes the count of U.S. firms either increasing or decreasing their dividends from the year-ago quarter of 2021-Q3 through the just-completed 2022-Q3.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends by Quarter, 2021-Q3 through 2022-Q3

The bad news is that the number of dividend cuts has risen in 2022-Q3. Sixty firms reduced their dividend payments to shareholders. That figure is up from the previous quarter's total of 51 and is more than double the year ago quarter of 2021-Q3.

The good news is more mixed. While the number of U.S. companies boosting their dividends increased quarter-over-quarter from 346 to 368, the year-over-year data is down, falling from 2021-Q3's 395 dividend rises.

The next chart breaks down the number of dividend increases and decreases for each month from January 2004 through September 2022.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 through September 2022

Here's how the U.S. stock market's dividend metadata has changed in September 2022 compared with August 2022's figures and with the year-ago totals recorded for September 2021:

  • A total of 4,082 U.S. firms declared dividends in September 2022, an increase of 354 from August 2022's recorded value, but 1,123 fewer than did a year earlier in September 2021.
  • 33 firms announced they would pay a special (or extra) dividend to their shareholders in September 2022, 41 less than August 2022 and 21 fewer than did in September 2021.
  • A total of 74 firms declared they would increase their dividends in September 2022. That's 75 fewer than did in August 2022 but four more than September 2021's count.
  • There were 13 dividend reductions announced during September 2022, an increase of one over August 2022's number of dividend cuts and five more than cut their dividends in September 2021.
  • Once again, zero U.S. firms omitted paying their dividends, continuing the trend established since June 2021.

Here's our sampling of announced dividend cuts for September 2022. If you're a fan of REITs that are sensitive to interest rate hikes, it wasn't a good month. If you're someone who gets upset at seeing fixed and variable dividend-paying companies listed together as dividend cutters, it's time to clutch your pearls.

We counted three variable dividend-paying firms in this month's sampling, each from the oil and gas sector, which is well below the level that would indicate developing trouble for the industry. Then again, that's looking backward and not forward in time, so let's do that next.

On 4 October 2022, accounting giant KPMG announced the results of its 2022 U.S. CEO Outlook Survey. Marketplace's David Brancaccio interviewed KPMG's Paul Knopp about the results, here's the key takeaway:

David Brancaccio: I see from your data that nearly every CEO thinks there will be a recession. But what is this, maybe I’ll be grasping at straws here, but maybe it’ll be a little recession? What are the CEOs telling you about if this is mild or severe?

Paul Knopp: David, what this survey revealed is that 91% of CEOs think there will be a recession in the next 12 months. And only one-third of those CEOs believe that that recession will be mild and short. So while the survey didn’t have anything affirmative about how long a recession would last, or the severity of a recession, it certainly is true that they’re expecting a recession, that’s not going to be just mild and short.

That's 91% of 1,325 CEOs who KPMG surveyed between 12 July and 24 August 2022 who are anticipating a recession in the next 12 months. We anticipate the U.S. stock market's metadata for dividend cuts will provide a near real-time indication of the relative health of the U.S. economy over that period, much as it has in the past.

But then, that's why we track dividends by the numbers every month, with a special focus on dividend cutters. It's among the simplest near real-time economic indicators out there!


Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 3 October 2022.

Standard and Poor. S&P Indicated Rate Change. [Excel Spreadsheet]. Accessed 3 October 2022.

Future Dividend Watch at the End of 2022-Q3

What does the future hold for the dividends of the S&P 500 (Index: SPX) now that we're reaching the end of the third quarter of 2022?

We're now in the gap between when the index' dividend futures contracts for 2022-Q3 have expired and the actual end of the calendar quarter. We find the outlook for the S&P 500's quarterly dividends per share improved since we checked them near the end of 2022-Q2. What's more, we also have a first look for dividend futures data extending through the end of 2023. The following chart reveals those expectations before the start of trading on Monday, 26 September 2022:

Past and Projected Quarterly Dividends Per Share Futures for S&P 500, 2021-Q4 Through 2023-Q4, Snapshot on 26 September 2022

Here's how the dividend futures forecast has changed for each quarter for which we presented data at the end of 2022-Q2:

  • 2022-Q3: Up $0.29 per share.
  • 2022-Q4: Up $0.63 per share.
  • 2023-Q1: Up $0.73 per share.
  • 2023-Q2: Up $0.40 per share.

As interest rates rise and recessionary pressures increase, we're starting to see firms like Fedex dial back their earnings forecasts, though not yet their dividends. It's an open question of how long that state of affairs can continue.

About Dividend Futures

Dividend futures indicate the amount of dividends per share to be paid out over the period covered by each quarters dividend futures contracts, which start on the day after the preceding quarter's dividend futures contracts expire and end on the third Friday of the month ending the indicated quarter. So for example, as determined by dividend futures contracts, the "current" quarter of 2022-Q3 began on Saturday, 18 March 2022 and will end on Friday, 16 September 2022.

That makes these figures different from the quarterly dividends per share figures reported by Standard and Poor, who reports the amount of dividends per share paid out during regular calendar quarters after the end of each quarter. This term mismatch accounts for the differences in dividends reported by both sources, with the biggest differences between the two typically seen in the first and fourth quarters of each year.


The past and projected data shown in this chart is from the CME Group's S&P 500 quarterly dividend index futures. The past data reflects the values reported by CME Group on the date the associated dividend futures contract expired, while the projected data reflects the values reported on 27 June 2022.

Will FedEx’ Dividend Crash?

From time to time, Political Calculations will follow a single stock. To qualify as a stock we follow, we look for one major characteristic: the stock must be on the verge of a major potential change involving its dividend, when the question of whether the company will change its dividend is still up in the air.

Stock Market Chaos!

In 2018, that stock belonged to General Electric (NYSE: GE), which followed through on our prediction that it would cut its dividend by a large amount. In 2020, we identified Iron Mountain (NYSE: IRM) as a promising investment based on the hypothesis it would not cut its dividend despite its depressed stock price.

Last Thursday, 15 September 2022, FedEx (NYSE: FDX) came roaring onto our radar screen when, after the market had closed, the firm tossed out the earnings guidance it presented to investors just three months earlier, because of the deterioration of the U.S. and global economy's outlook over the summer.

The company's stock price was hammered in the next day's trading, falling over 21% from the previous day's close, its "biggest plunge ever". But although the firm withdrew its previous earnings guidance and announced plans to shutter retail stores, park its cargo transport aircraft, freeze its hiring and cut back labor hours of its staff, it left one big cash-preserving option unaddressed. FedEx' leaders haven't announced what they might do about the company's quarterly dividend.

The following chart illustrates how we see FedEx' options potentially playing out:

Fedex (NYSE: FDX) Adjusted Closing Stock Price per Share vs Trailing Year Dividends per Share at Dividend Declaration Dates from March 2002 through August 2022

Superficially, FedEx' current situation is similar to what we found for Iron Mountain back in 2020. The company's current stock price is well depressed, where a handsome reward awaits if its outlook improves and no dividend cut is needed, or a major dividend cut needs to be on the table because its outlook remains grim.

The chart shows FDX lived through a very similar experience back in June 2020 as faces the company today. Then, the company's executives were presented with similar options. If the company's prospects improved, leaving the dividend alone would see its stock price soar back to the level the long term relationship between it and the company's trailing year dividends per share would place it. If they didn't, a dividend cut of 61% would make sense given the level of its stock price.

Ultimately, the prospects for the global economy and FedEx rapidly improved in the following months, and investors who might have bought into the company at that time were well rewarded. But what would happen today?

If the "outlook gets better" scenario holds, given where its stock closed on Friday, 16 September 2022, our simple analysis suggest FDX could double in value. But if the "things stay grim" scenario is the right one, FedEx' board of directors could cut the dividend by as much as 64%.

We have one more bit of information to consider that may tell us which way FedEx' board will go. In June 2022, they boosted FedEx' quarterly dividend from $0.75 to $1.15 per share, a 53.3% increase. When they implemented that dividend, it was based on the company's earnings outlook from that time. The one they just trashed. Since they've thrown out that forecast, we think FDX' dividend is now also on the cutting board, with at least a 50% reduction up for consideration. That's despite the company's history in avoiding cuts to its dividends for its shareholding owners.

The only question is now is how long it will be before the board acts. In ordinary circumstances, the company could wait to announce a cut when it will next declare dividends in early November. In an economy with deteriorating prospects, it would be to their advantage to act much sooner than that.


NASDAQ. FDX Dividend History. [Online Database]. Accessed 17 September 2022.

Yahoo! Finance. FedEx Corporation (FDX) Historical Data. [Online Database]. Accessed 17 September 2022.

Dividends by the Numbers in August 2022

The U.S. stock market had a mixed record for dividends in August 2022. Month over month, dividend increases were up and dividend cuts were down. But year-over-year, the opposite story is true, pointing to downward development for the stock market.

The following chart shows the monthly increases and decreases for dividends reported by Standard and Poor for each month from January 2004 through August 2022.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 through August 2022

Here's August 2022's dividend metadata:

  • There were 3,728 U.S. firms declaring dividends in August 2022. That's an increase of 277 from July 2022's total, but a decrease of 1,532 recorded in August 2021.
  • A total of 74 U.S. firms declared they would pay a special (or extra) dividend in August 2022, up by 32 from July 2022, and also up by 19 with respect to August 2021.
  • Standard and Poor counted 149 U.S. firms announcing they would increase dividends during August 2022, an increase of 4 over July 2022. Unfortunately, that's a decrease of 20 from August 2021's level.
  • 12 companies cut their dividends in August 2022, falling by 23 from what July 2022 saw. Compared to a year earlier however, we find August 2022's total come in five higher than it did in Augsut 2021.
  • There were Zero U.S. firms suspending (or omitting paying) their dividends in August 2022, matching the market's nil totals for both the previous month and the same month a year ago.

Here's what we know of the firms that announced dividend cuts during August 2022 from our sampling of dividend declarations:

In terms of affected industries, the list widely dispersed, though financial services accounts for 4 of the 11 firms in our sample. Two of these firms pay variable dividends however, so that's not necessarily anything out of the ordinary. What we find surprising is the lack of monthly dividend payers from the oil and gas sector, where we would have anticipated more of these firms cutting their dividends as oil prices have fallen from their highs in recent months.


Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 1 September 2022.

MarketBeat. Recent Dividend Cuts. [Online Database]. Accessed 31 August 2022.

Seeking Alpha. Dividend-Stocks News. [Online Database]. Accessed 31 August 2022.

Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 1 September 2022.

The S&P 500 vs Dividend Stock Funds

Morningstar's Amy Arnott wrote a column exploring whether dividend stocks provide shelter from a recession. It's a good article, and after reading it, we had a question. How would the S&P 500 (Index: SPX) compare with the three categories of dividend funds she discussed?

Those dividend stock fund categories include growth, growth and income, and income. In the following table, she gives some useful metrics for comparing how each type has performed during the past five years.

Morningstar: Risk and Returns for Three Dividend Strategies, 31 July 2022

The table presents the trailing twelve month dividend yield for each type of dividend stock fund, and also the five-year performance of each category for their Annualized Return, Standard Deviation (a measure of volatility), Sharpe Ratio (a risk-adjusted measure of investment return), and their Maximum Drawdown (the largest downward trend experienced from peak to trough).

We tracked down the same measures for the S&P 500. In the following chart, we've visually compared the index's dividend yield and 5-year annualized return with that of each of the dividend fund categories. We've also indicated the Sharpe Ratio for each in the column headings.

S&P 500 vs Dividend Growth, Growth + Income, and Income Fund Performance by Fund Type for Five Years Ending 31 July 2022

Although they have the lowest dividend yields, the S&P 500 and Dividend Growth fund categories provided the best total returns. That's also true after considering their Sharpe Ratio values, for which Arnott had indicated for the Dividend Growth category "posted the best combination of risk and return", beating the other two types of dividend funds. Speaking of which, Arnott recognizes that the dividend stock funds might have recorded better returns if not for having higher fees. She found that low-cost funds outperformed high-cost funds for overall returns.

The next chart compares the S&P 500's and the three dividend stock fund categories' standard deviation (volatility) and their worst recorded downward trend over the past five years.

S&P 500 vs Dividend Growth, Growth + Income, and Income Fund Volatility by Fund Type for Five Years Ending 31 July 2022

The standard deviation data for the S&P 500, Dividend Growth, and Dividend Income funds were all similar, with the Dividend Growth and Income fund recording the lowest volatility. Meanwhile, the S&P 500 clearly outperformed the other fund types by recording the smallest drawdown during the past five years, with Dividend Growth funds ranking second lowest. Dividend Income funds recorded the most adverse drawdown in the five year period ending on 31 July 2022.

Altogether, the data indicates the S&P 500 had the best overall performance, followed by Dividend Growth funds, then Dividend Growth and Income funds, and finally, Dividend Income funds.


Arnott, Amy. Do Dividend Stocks Provide Shelter From Recession? Morningstar. [Online Article]. 8 August 2022.

Morningstar. S&P 500 PR Risk Data. [Online Application]. Accessed 14 August 2022.

PortfoliosLab. S&P 500 Portfolio Trailing Twelve Month Dividend Yield [Online Application]. Accessed 14 August 2022.