The pace of dividend cuts in the U.S. surged during the past week and a half, where we've added an additional 44 distressed firms either reducing their dividends or suspending payments to our ongoing tally for April 2020.
To put that number in perspective, when recessionary conditions are present in the U.S. economy, we'll see firms announce dividend cuts at a rate of 25 or more during the course of a single month. We now anticipate triple that figure by the time April 2020 is over.
The following chart compares the current pace of dividend cuts during 2020-Q2 to the same quarter in the years 2017, 2018, and 2019, which is the stock market equivalent to those excess mortality charts illustrating the full impact of the COVID-19 coronavirus pandemic.
We confirm the number of dividend cuts and suspensions announced in the quarter to date for our 2020-Q2 sampling is elevated well above the comparatively healthy quarters of 2017-Q2 and 2018-Q2, and is also considerably higher than the year ago quarter of 2019-Q2, when the oil and gas sector of the U.S. economy experienced a relatively short period of distress.
Here is the list of U.S. firms announcing dividend cuts or omitting dividend cuts in the seven trading days since our previous report:
- Apache (NYSE: APA)
- Goodyear Tire & Rubber (NYSE: GT)
- Cedar Shopping Centers (REIT-Retail) (NYSE: CDR)
- Green Plains Partners (NASDAQ: GPP)
- Noble Energy (NYSE: NBL)
- Chesapeake Energy (NYSE: CHK)
- Permianville Royalty Trust (NYSE: PVL)
- VOC Energy Trust (NYSE: VOC)
- Service Properties (REIT-Hotel) (NASDAQ: SVC)
- Kohl's (NYSE: KSS)
- Schlumberger (NYSE: SLB)
- Targa Resources (NYSE: TRGP)
- San Juan Basin Royalty Trust (NYSE: SJT)
- Cross Timbers Royalty Trust (NYSE: CRT)
- Permian Basin Royalty Trust (NYSE: PBT)
- Western Midstream Partners (NYSE: WES)
- RBB Bancorp (NASDAQ: RBB)
- EnLink Midstream (NYSE: ENLC)
- Mesa Royalty Trust (NYSE: MTR)
- Landmark Infrastructure (Real Estate) (NASDAQ: LMRK)
- HCA Healthcare (NYSE: HCA)
- Anworth Mortgage Asset (REIT-Mortgage) (NYSE: ANH)
- DCP Midstream (NYSE: DCP)
- STMicroelectronics (NYSE: STM)
- BBX Capital (NYSE: BBX)
- Retail Opportunity Investments (REIT-Retail) (NASDAQ: ROIC)
- Moelis (NYSE: MC)
- Manning & Napier (NYSE: MN)
- Black Stone Minerals (NYSE: BSM)
- Bluegreen Vacations (NYSE: BXG)
- Patterson-UTI Energy (NYSE: PTEN)
- Alliance Data Systems (NYSE: ADS)
- Invesco (NYSE: IVZ)
- 1st Source (NASDAQ: SRCE)
- Lifetime Brands (NASDAQ: LCUT)
- Northern Technologies (NASDAQ: NTIC)
- Blackstone Group (NYSE: BX)
- San Juan Basin Royalty Trust (NYSE: SJT)
- Holly Energy Partners (NYSE: HEP)
- USD Partners (NYSE: USDP)
- Dynamic Materials (NASDAQ: BOOM)
- Community West Bancshares (NASDAQ: CWBC)
- CONSOL Coal Resources (NYSE: CCR)
- CenterPoint Energy (NYSE: CNP)
The oil and gas sector makes up 20 of the 44 firms above, an outcome of the fall in demand and oil prices that has taken place since with the global coronavirus pandemic. The finance sector, including real estate investment trusts, accounts for another 10 firms, with the remainder split among 11 other industrial sectors, confirming the broad impact of the coronavirus recession.
The distribution of these dividend cuts among industries is a consequence of both the degree of distress they are facing and also of the calendar, with many companies following their regular schedule for declaring dividends, with the past seven trading days being heavily loaded with firms in the oil and gas sector. We'll have a more complete analysis after the end of the month with the next installment of our monthly Dividends By The Numbers series.
References
Seeking Alpha Market Currents Dividend News. [Online Database]. Accessed 24 April 2020.
Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 24 April 2020.
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