Standard and Poor's market attributes report came out a bit late this month, but with its release, we find that like the previous month, August 2018 has been a fairly solid month for the U.S. stock market.
The following chart shows the number of dividend increases and decreases that have been declared in each month since January 2004.
Let's run through the U.S. stock market's dividend numbers for August 2018:
- 3,552 firms issued some kind of declaration about their dividend policies during August 2018, which was up by 299 from the 3,253 that issued annoucements about their dividends in the previous month, and also up by 98 from the 3,454 that declared dividends in August 2017.
- August 2018 had 31 U.S. firms announce that they would pay an extra, or special, dividend to their shareholders, which was up by from the 22 that make special arrangements to pay the owners of their stock in July 2018, and up by 6 from the number that did in the same month a year ago.
- If there was disappointing news to be found for the month, it was in the 128 companies that announced they would increase their dividends in August 2018. This figure was down by 46 from the number that announced dividend rises in July 2018, but was down by just 4 from the figure recorded in August 2017.
- The best news of the month was that there were only 15 U.S. companies announcing dividend cuts in August 2018, which was eight less that the amount cutting dividends in July 2018 and one less than in August 2018. In fact, August 2018 saw the lowest number of dividend cuts reported since April 2017's total of 14.
- Just 2 firms declared that they would omit paying dividends, up from July 2018's null entry and down by 13 from August 2017.
Because it was such a good month from the perspective of dividend cuts, and also from the perspective of omitted dividend payments, we put together the following chart showing the combined total of each, which provides a pretty good picture of the overall level of distress within the publicly-traded portion of the private sector of the U.S. economy, and as it happens, when infrequent changes in U.S. tax laws affect how companies set their dividend paying policies.
We're afraid that we don't have any details on which firms omitted paying dividends during the month, but we were able to identify 12 of the 15 companies that announced dividend reductions, which can provide some insight into what sectors of the U.S. economy are potentially experiencing at least some level of distress.
- Carlyle Group (NYSE: CG)
- R.R. Donnelley & Sons (NYSE: RRD)
- Sabine Royalty Trust UBI (NYSE: SBR)
- Farmland Partners (NYSE: FPI)
- New Senior Investment (NYSE: SNR)
- Orchid Island Capital (NYSE: ORC)
- Marine Petroleum Trust (NASDAQ: MARPS)
- Permian Basin Royalty Trust (NYSE: PBT)
- PermRock Royalty Trust (NYSE: PRT)
- Cross Timbers Royalty Trust (NYSE: CRT)
- Annaly Capital Mgmnt (NYSE: NLY)
- Spirit Realty Capital (NYSE: SRC)
Of the 12 dividend cutting firms in our sample, half are either financial firms or real estate investment trusts, five are monthly dividend paying firms out of the oil and gas sector whose dividend payouts are a fixed percentage of their variable earnings, and one, R.R. Donnelley & Sons, makes money in the business services and marketing industries.
Update 14 September 2018: A very knowledgeable reader reports that Annaly Capital Management doesn't properly belong in this tally, writing that "NLY is not a dividend cut. Since the merger with MTGE the dividend was split. NLY dividend still 0.30 for the quarter; paid September (0.222) and October (0.078) of this year. This fakes out a lot of data gathering tools."
Data Sources
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 7 September 2018.
Seeking Alpha Market Currents. Filtered for Dividends. [Online Database]. Accessed 3 September 2018.
Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 3 September 2018.
Labels: dividends
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