Dividends: U.S. Economy Slipped Somewhat in August 2016

After posting their best two consecutive months since 2014, our monthly sampling of the number of U.S. firms acting to cut their dividends in August 2016 rose significantly.

Cumulative Number of Announced Dividend Cuts in the U.S. by Day of Quarter in 2016, 2016-Q1 vs 2016-Q2 vs 2016-Q3, Snapshot on 2016-09-02

The biggest change is that the number of firms in the oil production sector of the U.S. economy has declined significantly in recent months, thanks largely to the rebound in crude oil prices since they bottomed in February 2016.

Where they once dominated the count of the number of dividend cutting firms, oil and gas firms now only make up a third of the total of our sample of 17 dividend cutting firms for the month. The following chart gives an idea of where the level of distress in the U.S. economy appears to be increasing, but since it has been drawn from a small sample, we recognize that it may only represent a statistical blip that would hopefully not be sustained.

Sample of DIvidend Cuts by U.S. Industrial Sector in August 2016

The table below lists the U.S. firms that announced dividend cuts during August 2016.

Publicly Traded U.S. Companies Cutting Dividends in August 2016
Date Company Old Dividend New Dividend
2-Aug-2016 Ardmore Shipping (NYSE: ASC) $0.16000 $0.11000
3-Aug-2016 Medallion Financial (NASDAQ: MFIN) $0.25000 $0.05000
4-Aug-2016 Nordic American Offshore (NYSE: NAO) $0.08000 $0.05000
4-Aug-2016 Computer Programs and Solutions (NASDAQ: CPSI) $0.64000 $0.34000
5-Aug-2016 Apollo Investment (NASDAQ: AINV) $0.20000 $0.15000
9-Aug-2016 Textainer Group (NYSE: TGH) $0.24000 $0.03000
9-Aug-2016 DHT Holdings (NYSE: DHT) $0.25000 $0.23000
10-Aug-2016 Medley Capital (NYSE: MCC) $0.30000 $0.22000
11-Aug-2016 Houston Wire & Cable (NYSE: HWCC) $0.06000 $0.03000
15-Aug-2016 Magic Software (NASDAQ: MGIC) $0.09000 $0.08500
18-Aug-2016 Communications Systems (NASDAQ: JCS) $0.16000 $0.04000
19-Aug-2016 Marine Petroleum Trust (NASDAQ: MARPS) $0.07328 $0.04351
21-Aug-2016 Mesa Royalty Trust (NYSE: MTR) $0.06440 $0.04130
22-Aug-2016 San Juan Basin Royalty Trust (NYSE: SJT) $0.02783 $0.01845
22-Aug-2016 Williams Cos (NYSE: WMB) $0.64000 $0.20000
22-Aug-2016 Medley Capital (NYSE: MCC) $0.30000 $0.22000
29-Aug-2016 San Juan Basin Royalty Trust (NYSE: SJT) $0.02783 $0.01845

These are primarily firms with relatively small market capitalizations, where even the large dividend cuts announced by Medallion Financial, Textainer Group, Communication Systems and the Williams Companies did little to move the major stock market indices during August 2016.

Data Sources

Seeking Alpha Market Currents Dividend News. [Online Database]. Accessed 1 September 2016.

Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 1 September 2016.