Unexpectedly Intriguing!
July 11, 2017

June 2017 ended the best quarter for dividends in the last three years. Before getting into the tally of dividend data for the month, let's take a quick look at the number of publicly-traded U.S. companies that either increased or decreased their dividends in each month from January 2004 through June 2017 in the following chart.

Number of Public U.S. Companies Increasing (Blue) or Decreasing (Red) Their Dividends, January 2004 through June 2017

Let's get into the numbers that S&P reported for June 2017 (Excel spreadsheet), which coincidentally also marks the end of the second quarter of 2017:

  • 3,778 U.S. firms issued some kind of declaration regarding their dividends in June 2017, which is up from the 3,536 that did so in May 2017 and is also up from the 3,636 that made dividend declarations a year earlier in June 2016.
  • 26 U.S. companies announced that they would pay a special or extra dividend payment in June 2017, down from 48 in May 2017 and also down from 28 in June 2016. For 2017-Q2, 101 firms announced they would make an extra dividend payment, which is up from the 92 that did back in 2016-Q2.
  • Historically, June is traditionally the month with the fewest number of dividend increases announced during it in each year. That said, 73 firms boosted their dividend payments to their shareholders, which was down from 190 in May 2017, but up from the 70 that hiked their dividends back in June 2016. For the quarter of 2017-Q2, some 415 dividend increases were announced, up slightly from the 405 dividend increases announced in 2016-Q2.
  • In June 2017, 21 U.S. firms announced that they would cut their dividends, up from the 18 reported in May 2017, but down dramatically from the figure of 75 that was announced a year earlier in June 2016, when the tally of dividend cutting firms outnumbered the quantity of dividend increasing firms for the first and only time since the Great Recession. For 2017-Q2, there were a total of 53 dividend cuts, which compares with 2016-Q2's total of 123.
  • Seven companies simply omitted making any dividend payment in June 2017, down from the ten that did in May 2017, but up slightly from the five that did in June 2016. In 2017-Q2, a total of 19 firms passed on making dividend payments during the quarter, which was down from the 35 that did back in 2016-Q2.

Taking a closer look at dividend cuts, the pace at which dividend cuts were announced during 2017-Q2 in our near-real time sampling was similar to that of 2017-Q1, so we'll omit showing that chart in favor of showing the year over year comparison between 2017-Q2 and 2016-Q2.

Cumulative Number of Public U.S. Companies Decreasing Their Dividends by Day of Quarter, 2017-Q2 versus 2016-Q2

Taking a closer look at our sample of dividend cuts collected from dividend declarations reported by Seeking Alpha and the Wall Street Journal, we found that the oil and gas industry showed the highest level of distress, which is attributable to the decline of oil prices throughout the quarter, which negatively impacted their revenues and profits.

Sampling of Dividend Cuts by Industrial Sector, 2017-Q2

Financial industry firms combined with Real Estate Investment Trusts (REITs) to make up the second-most negatively impacted sector of concentrated distress in the U.S. economy, where many of these firms were faced with the fallout from the Federal Reserve's decision to hike interest rates in the first quarter of 2017, which was followed by a second rate hike announcement in June 2017.

The only other industrial sector that stood out as experiencing an unusually high level of distress during the quarter was chemical manufacturers, particularly those who produce agricultural fertilizers. Those dividend cut actions followed bad winter weather events in late April 2017 that harmed the nation's winter wheat crop over a four-state region that accounts for nearly 50% of its annual production.

Data Sources

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 7 July 2017.

Seeking Alpha Market Currents. Filtered for Dividends. [Online Database]. Accessed 10 July 2017.

Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 10 July 2017.


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