For the fourth month in a row, the number of publicly-traded U.S. companies announcing that they are reducing cash dividend payments to their shareholders has remained elevated at levels that are consistent with periods of economic contraction and recession in the U.S. economy.
In March 2015, the number of firms acting to cut their dividends climbed back up to 56, over five and a half times the maximum number that we've observed is consistent with a healthy, growing economy, and more than double the level where we've previously observed that some degree of economic contraction has occurred, outside of periods when changes in U.S. tax policies drove changes in the dividend policies of U.S. firms.
We've been tracking Seeking Alpha's Market Currents reports (filtered for Dividends) and the Wall Street Journal's daily listing of Dividends Declarations to try to keep up with dividend cuts as they have been announced throughout the month. These sources have some holes in their coverage, in that we've only identified 33 of the 56 companies that acted to cut their dividends during March 2015 according to Standard & Poor's Dividend Action Report. The table below presents the full list that we were able to assemble from these sources to get some idea of the breadth of distress in the U.S. economy:
| Publicly Traded U.S. Companies Cutting Dividends in March 2015 | |||||
|---|---|---|---|---|---|
| Date | Company | Symbol | Was | Now | Pct Change |
| 2-Mar-2015 | Voya Prime Rate Trust | PPR | $0.02900 | $0.02700 | -6.9% |
| 4-Mar-2015 | U.S. Bncp Pfd Ser A | USBA | $8.94400 | $8.74000 | -2.3% |
| 4-Mar-2015 | US Bancorp Dep pfd. | USBHH | $0.22361 | $0.21875 | -2.2% |
| 6-Mar-2015 | Omega Hlthcare Investors | OHI | $0.53000 | $0.36000 | -32.1% |
| 9-Mar-2015 | FR STRATSs 006-2 GS Grp | GJS | $0.01927 | $0.01906 | -1.1% |
| 9-Mar-2015 | STRATS Sers 2006-1 P&G . Ser 2006-1 | GJR | $0.01535 | $0.01376 | -10.4% |
| 9-Mar-2015 | Landauer | LDR | $0.55000 | $0.27500 | -50.0% |
| 10-Mar-2015 | CWC Energy Services | CAWLF | $0.01750 | $0.00500 | -71.4% |
| 10-Mar-2015 | STRATS Dom Res Ser 05-06 | GJP | $0.06370 | $0.05753 | -9.7% |
| 11-Mar-2015 | Great Northern Iron Ore Prop | GNI | $2.00000 | $1.30000 | -35.0% |
| 12-Mar-2015 | Orbital ATK | OA | $0.32000 | $0.26000 | -18.8% |
| 12-Mar-2015 | Penn West Petroleum | PWE | $0.14000 | $0.01000 | -92.9% |
| 12-Mar-2015 | Capstead Mortgage | CMO | $0.34000 | $0.31000 | -8.8% |
| 12-Mar-2015 | OHA Investment | OHAI | $0.16000 | $0.12000 | -25.0% |
| 13-Mar-2015 | PHX Energy Services | PHXHF | $0.07000 | $0.03500 | -50.0% |
| 13-Mar-2015 | Pacholder High Yield Fund | PHF | $0.05300 | $0.05000 | -5.7% |
| 16-Mar-2015 | Dynex Capital | DX | $0.25000 | $0.24000 | -4.0% |
| 17-Mar-2015 | CARBO Ceramics | CRR | $0.33000 | $0.10000 | -69.7% |
| 18-Mar-2015 | MS Non-Cum. Pfd. Ser A | MS+A | $0.25556 | $0.25000 | -2.2% |
| 18-Mar-2015 | Silver Wheaton | SLW | $0.06000 | $0.05000 | -16.7% |
| 19-Mar-2015 | Fidelity Nasdaq Composite Index Tracking ETF | ONEQ | $0.59000 | $0.45000 | -23.7% |
| 19-Mar-2015 | American Capital Mortgage | MTGE | $0.65000 | $0.50000 | -23.1% |
| 20-Mar-2015 | Resource Capital | RSO | $0.20000 | $0.16000 | -20.0% |
| 20-Mar-2015 | Wheeler Real Est Invt Tr | WHLR | $0.03500 | $0.01750 | -50.0% |
| 23-Mar-2015 | Cross Timbers Royalty Tr | CRT | $0.15170 | $0.11572 | -23.7% |
| 23-Mar-2015 | Hugoton Royalty Tr Un | HGT | $0.03609 | $0.01838 | -49.1% |
| 23-Mar-2015 | Permian Basin | PBT | $0.03146 | $0.02158 | -31.4% |
| 23-Mar-2015 | San Juan Basin Royalty Tr | SJT | $0.06984 | $0.02671 | -61.8% |
| 24-Mar-2015 | KCAP Financial | KCAP | $0.25000 | $0.21000 | -16.0% |
| 26-Mar-2015 | Western Asset Mortgage Capital | WMC | $0.70000 | $0.67000 | -4.3% |
| 27-Mar-2015 | Javelin Mortgage Invt | JMI | $0.12000 | $0.09000 | -25.0% |
| 27-Mar-2015 | Friedman Industries | FRD | $0.02000 | $0.01000 | -50.0% |
| 31-Mar-2015 | Jinpan | JST | $0.16000 | $0.03000 | -81.3% |
In addition to the elevated number of oil and mineral extraction-related firms that we saw in February 2015, we also find an increase in the number of investment-related firms and trusts, particularly Real Estate Investment Trusts, along with a small handful of manufacturing-related firms. What that tells us is that in March 2015, it was more than just distressed firms in the oil and extraction-related industries that were facing problems.
We'll close by taking brief look at the basic trajectories that stock prices are likely to follow through much of the rest of 2015.
Each of these alternate trajectories are projected from historical stock prices, with the differences between them coinciding with the expectations that investors have for changes in the growth rate of dividends per share for the indicated future quarters. The actual trajectory that stock prices will follow is dependent upon the future quarter that investors focus their forward-looking focus upon in making the current day investment decisions.
At present, assuming no significant changes in the amount of dividends expected to be earned in the future, investors would appear to have split their focus almost equally between 2015-Q2 and 2015-Q3 in setting stock prices since the Federal Reserve's March meeting, where the Fed hedged the timing of when it is expected to begin hiking short term interest rates. The Fed is now expected to begin hiking rates anytime from June 2015 (the end of 2015-Q2) to September 2015 (the end of 2015-Q3).
Regardless, based purely on the fundamentals as they are expected today, it would appear that stock prices are likely to drift sideways to lower throughout much of the year.
Data Source
Standard & Poor. Monthly Dividend Action Report. [Excel Spreadsheet]. Accessed 1 April 2015.
Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:
ironman at politicalcalculations
Thanks in advance!
Closing values for previous trading day.
This site is primarily powered by:
CSS Validation
RSS Site Feed
JavaScript
The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.
Other Cool Resources
Blog Roll
