April 2019 was not a good month for investors looking for sources of dividend income, where the U.S. stock market saw both fewer increases and more decreases than what was recorded for the same month a year earlier.
The following chart shows the monthly increases and decreases for dividends reported by Standard and Poor for each month from January 2004 through April 2019.
Let's run through the metadata for U.S. dividend payers in April 2019:
- 3,107 U.S. firms declared dividends in April 2019, a decrease of 1,207 from the number recorded one month earlier. That figure is also down by 281 from April 2018's total of 3,388.
- Some 32 U.S. firms announced they would pay an extra, or special, dividend to their shareholders in April 2019, an increase of 1 over the number recorded in March 2019, and also a decrease of 2 from April 2018.
- 157 U.S. firms announced they would increase their cash dividend payments to shareholders in April 2019, an increase of 6 over the number recorded in March 2019 but a decrease of 32 from the 189 dividend increases declared back in April 2018.
- A total of 29 publicly traded companies cut their dividends in April 2019, a decline of 16 from the number recorded in March 2019, but 13 worse than the 16 cuts recorded in the same month a year ago.
- Only 1 U.S. firm omitted paying their dividends in April 2019, a decrease of 1 from the number recorded in March 2019. Year over year, that figure is an improvement over the count of four firms that omitted paying dividends in April 2018.
The total number of dividend cuts has continued to hold above the level that suggests recessionary conditions are present within the U.S. economy, so we've extracted a sampling of dividend cuts announced in real time during April 2019 which industries are experiencing some degree of distress. In the first part of this listing, we've listed the firms that set their dividend payments independently of their earnings and cash flow, whose corporate boards had to specifically act to either cut or suspend cash dividend payments to shareholders during April 2019.
- Medley Management (NYSE: MDLY)
- Senior Housing Properties Trust (REIT) (NASDAQ: SNH)
- Blueknight Energy Partners (NASDAQ: BKEP)
- RPC (NYSE: RES)
- First Financial Bankshares (NYSE: FFIN)
- Martin Midstream Partners (NYSE: MMLP)
- Summit Midstream Partners (NYSE: SMLP)
- Kimbell Royalty Partners (NYSE: KRP)
In the second part of our listing of dividend-cutting firms in April 2019, we've focused on firms that pay variable dividends to their shareholders, often as a set percentage of their earnings, revenues, or cash flow. This group of firms includes a significant number of companies that pay dividends monthly, which makes them ideal for assessing recent business conditions in their respective industries.
- Sachem Capital (NYSE: SACH)
- MV Oil Trust (NYSE: MVO)
- BP Prudhoe Bay Royalty Trust (NYSE: BPT)
- Mesabi Trust (NYSE: MSB)
- Mesa Royalty Trust (NYSE: MTR)
- Dorchester Minerals (NASDAQ: DMLP)
- Permian Basin Royalty Trust (NYSE: PBT)
- Blackstone Group (NYSE: BX)
- San Juan Basin Royalty Trust (NYSE: SJT)
- Permianville Royalty Trust (NYSE: PVL)
- CVR Partners (NYSE: UAN)
- SandRidge Permian Trust (NYSE: PER)
- SandRidge Mississippian Trust I (NYSE: SDT)
- SandRidge Mississippian Trust II (NYSE: SDR)
- AllianceBernstein (NYSE: AB)
- Viper Energy (NASDAQ: VNOM)
For April 2019, we counted a total of 24 dividend cuts in our sampling, which is just five short of the total dividend cuts recorded by S&P for the month. Of these, 15 are firms that are involved in the oil and gas sector of the U.S. economy, while 6 do business in the financial sector, in which we group interest rate-sensitive Real Estate Investment Trusts. Two firms in the mining sector and one firm in the chemical industry round out the April 2019 sample.
The following chart compares the pace of dividend cuts in the current quarter of 2019-Q2 through the first month of the second quarter of 2018.
Compared with the same point of time in the year-ago quarter of 2018-Q2, the current quarter of 2019-Q2 is off to a rocky start, with the number of dividend cutting firms right on the edge of signaling some degree of contraction occurring within the distressed sectors of the U.S. economy.
References
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 30 April 2019.
Seeking Alpha Market Currents. Filtered for Dividends. [Online Database]. Accessed 30 April 2019.
Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 30 April 2019.
Labels: dividends
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