At first glance, October 2023's data for dividend changes looks like an improvement from September 2023. Month-over-month, the number of declared dividend increases rose and the number of dividend decreases fell, which is a positive development. Moreover the number of decreases is well below the threshold that indicates recessionary conditions are afoot within the U.S. economy.
That perspective changes somewhat when we make a year-over-year comparison, where we find the picture is still positive overall, but of a more mixed character. October 2022's number of dividend decreases was much higher, owing to that year's earnings recession, so that portion of October 2023's picture is brighter. But the number of firms announcing dividend increases has fallen year-over-year, which casts some gloom onto the scene. If their outlooks were better, and it should be with 2022's earnings recession in the rear view mirror, more firms would be announcing dividend increases. They're not, continuing a pattern we've been observing for months.
The following chart illustrates all Standard & Poor's monthly data for dividend increases and decreases going back to January 2004.
The following table presents S&P's dividend metadata for October 2023. It summarizes how the month's dividend data compares in both Month-over-Month (MoM) and Year-Over-Year (YoY) terms with previously reported data:
| Dividend Changes in October 2023 | |||||
|---|---|---|---|---|---|
| Oct-2023 | Sep-2023 | MoM | Oct-2022 | YoY | |
| Total Declarations | 3,512 | 4,408 | -896 ▼ | 3,267 | 245 ▲ |
| Favorable | 204 | 99 | 105 ▲ | 210 | -6 ▼ |
| - Increases | 137 | 62 | 75 ▲ | 149 | -12 ▼ |
| - Special/Extra | 67 | 36 | 31 ▲ | 59 | 8 ▲ |
| - Resumed | 0 | 1 | -1 ▼ | 2 | -2 ▼ |
| Unfavorable | 18 | 22 | -4 ▼ | 62 | -44 ▼ |
| - Decreases | 18 | 22 | -4 ▼ | 62 | -44 ▼ |
| - Omitted/Passed | 0 | 0 | 0 ◀▶ | 0 | 0 ◀▶ |
Following September 2023's lows, the month-over-month data is better in October 2023 with an increase of 105 favorable dividend changes paired with four fewer unfavorable actions. Year-over-year however, October 2023 underperformed October 2022 with fewer favorable actions and a higher number of unfavorable dividend changes.
Our sampling of October 2023's dividend declarations includes 12 of the 22 announced unfavorable changes. The sample includes 11 decreases and one omission, or suspension, for BP Prudhoe Bay Royalty Trust. Here's the list:
- Cal-Maine Foods (Variable) (NASDAQ: CALM)
- BP Prudhoe Bay Royalty Trust (Variable) (NYSE: BPT)
- Balchem (Variable) (NASDAQ: BCPC)
- Sabine Royalty Trust (Variable) (NYSE: SBR)
- Orchid Island Capital (REIT-Mortgage) (Fixed) (NYSE: ORC)
- Mesa Royalty Trust (Variable) (NYSE: MTR)
- San Juan Basin Royalty Trust (Variable) (NYSE: SJT)
- Sachem Capital (REIT-Mortgage) (Variable) (NYSE: SACH)
- AG Mortgage Investment Trust (REIT-Mortgage) (Fixed) (NYSE: MITT)
- First Foundation (Fixed) (NASDAQ: FFWM)
- Kellanova (Fixed) (NYSE: K)
- V.F. Corporation (Fixed) (NYSE: VFC)
Looking at the industrial sector representation, the oil and gas sector accounts for a third of the sample. The number of these firms however falls well below the background noise range we expect for the industry given both how the price of oil has changed in recent months and that most of these firms pay variable dividends.
The nation's real estate industry continues to account for a significant share of companies announcing negative changes in their dividend payouts. Three mortgage-REITs made this months list, largely because of the negative effect of the Federal Reserve's series of rate hikes from March 2022 through July 2023 on that sector of the economy. Speaking of which, one bank announced it would reduce its dividends during October 2023.
Rounding out the list, we found two firms from the food production sector, one chemical producer, and one apparel industry firm.
References
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 1 November 2023.
Image credit: Blurry photo of a woman's face, uncertain direction photo by Taylor Deas-Melesh on Unsplash.
Labels: dividends
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