July 2025 has come and gone. For the dividend paying stocks of the U.S. stock market, the month was once again net-negative when measured year-over-year. There were fewer favorable changes, such as dividend increases, special (or extra) dividend payouts to shareholders during the month. There were also more unfavorable changes in the form of dividend decreases during the month.
Adding up all the favorable and unfavorable year-over-year changes in dividends, we find the single number that summarizes the month is -15.
July 2025 represents the sixth consecutive month in which that outcome has occurred. The falling number of dividend increases is the continuation of a general trend that's been underway since 2023, coinciding with the period in which the inflation unleashed by the Biden administration caught up with the First In, First Out (FIFO) accounting rules most U.S. businesses use to determine their level of profitability. In 2021-2022, when that inflation was inflicted on Americans, firms reported higher profits because FIFO accounting rules require them to "consume" their oldest acquired inventories first when determining their earnings, regardless of their cost of replacing it. Only after fully drawing down their accounting supply of lower cost inventory could they report the cost of the higher cost inventory that replaced it in calculating their earnings.
From 2023 into 2025, the inflated cost of inventory has effectively shrank the reported profits of many of these firms. Consequently, fewer firms have the profitability needed to back paying higher dividends to their shareholding owners, which is why the number of dividend increases has been on the decline throughout this period.
July 2025's favorable and unfavorable dividend actions are tallied in the following table, which shows how much they changed both since July 2024 (year-over-year) and since June 2025 (month-over-month).
| Dividend Changes in July 2025 | |||||
|---|---|---|---|---|---|
| Jul-2025 | Jun-2025 | MoM | Jul-2024 | YoY | |
| Total Declarations | 4,698 | 4,970 | -272 ▼ | 3,882 | 816 ▲ |
| Favorable | 149 | 118 | 31 ▲ | 156 | -7 ▼ |
| - Increases | 104 | 60 | 44 ▲ | 116 | -12 ▼ |
| - Special/Extra | 45 | 58 | -13 ▼ | 39 | 6 ▲ |
| - Resumed | 0 | 0 | 0 ◀▶ | 1 | -1 ▼ |
| Unfavorable | 13 | 13 | 0 ◀▶ | 5 | 8 ▲ |
| - Decreases | 13 | 13 | 0 ◀▶ | 5 | 8 ▲ |
| - Omitted/Passed | 0 | 0 | 0 ◀▶ | 0 | 0 ◀▶ |
The following chart visualizes the monthly counts of dividend increases and decreases from January 2004 through July 2025. Be sure to note the falling number of firms announcing dividend rises since early 2023.
The number of firms announcing decreased dividend payouts remains below the threshold that clearly signals recessionary conditions are afoot in the U.S. economy. The declining number of favorable dividend announcements indicates firms are indeed experiencing negative headwinds that they expect will continue for some time longer.
References
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 5 August 2025.
Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a bear wearing a suit who is blocking salmon that say 'DIVIDENDS' from getting to the Wall Street bulls who are fishing for them".
Labels: dividends
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