Unexpectedly Intriguing!
November 8, 2017

October 2017 was a good month for dividend-paying stocks in the U.S. stock market, although still with some cause for concern.

The following chart shows the number of U.S. firms that have taken action to either increase or decrease their dividends in each month from January 2004 through October 2017.

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

Let's run through the numbers for October 2017 to see how that month compares to what we saw just one month ago, and also one year ago....

  • 3,077 U.S. firms issued declarations of their dividend policies during October 2017, which is down from the 3,533 that did so in the third quarter-ending month of September 2017. Compared to a year ago however, the number of companies that declared their dividends has increased from the 2,951 that declared their dividends in October 2016.
  • 41 U.S. companies announced that they would pay a special or extra dividend payment in October 2017, which is more than double the 17 that did in September 2017, but only up slightly from the 35 that paid out extra money to their shareholders in October 2016.
  • No fewer than 184 American companies announced dividend increases in October 2017, rising well above the 74 that announced dividend rises in September 2017. The number of increases is also higher than the 171 rises announced during October 2016.
  • 19 companies announced that they were cutting their dividends in October 2017, falling from both the 33 that cut dividends in September 2017 and the 21 that cut their dividends back in October 2016.
  • Finally, 6 American companies omitted paying their dividends in October 2017, up from 0 in September 2017, but down from the 11 that did so in October of a year earlier.

Companies that omit paying out dividends are, like companies that announce reductions in their future dividend payments, undergoing some degree of financial distress. Our second chart combines the two to provide a better sense of how the relative health of the U.S. economy has evolved in the period from January 2004 through October 2017.

Number of Public U.S. Companies Cutting or Omitting Their Dividends, January 2004 through October 2017

The combined total of 25 cut or omitted dividends for October 2017 puts the month right at the line where we identify a division between recessionary conditions being present in the U.S. economy and where the economy can be considered to be relatively healthy. As you can see, 2017 has been a much better year than either 2015 or 2016.

For more insight about the companies that acted to either cut or omit their dividends in October 2017, see our roundup of what we learned from our sampling for the month, which appears to have captured 100% of the companies that took either action indicating that they were experiencing some degree of distress.

Finally, we thank S&P's Howard Silverblatt for his quick response to our inquiry regarding the availability of the October 2017 data - this post wouldn't have been possible without it!

Data Source

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

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