Unexpectedly Intriguing!
November 5, 2019

October 2019 presents a mixed picture for the relative health of dividend paying companies in the U.S. stock market. The good news is that the number of dividend cuts, a measure of the relative level of distress in the U.S. economy, dropped below the level that suggests the U.S. economy is experiencing recessionary conditions. The bad news is that the number of dividend increases recorded during the month was at its lowest level for any October since 2011, where this measure indicates that growth in the U.S. economy is slowing down.

The following chart shows the number of U.S. firms either increasing (blue) or decreasing (red) their dividends in each month since January 2004.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 thropugh October 2019

Before we review the metadata for October 2019's dividend payers, we need to catch up with Standard & Poor's revisions to its dividend statistics for the previous month. Here is how the numbers for September 2019 changed from what S&P previously reported in early October 2019.

  • Dividend declarations for September 2019 was revised up from 3,686 to 4,020.
  • Extra (or special) dividend payments were revised upward from 21 to 24.
  • Dividend rises changed from 50 to 67 for the month.
  • Resumptions were revised upward from 7 to 8.
  • The number of dividend cuts remained unchanged at 27.
  • Omitted dividends were revised up from 7 to 8 for September 2019.

With all the figures either increasing or unchanged, we suspect that S&P's automated systems simply missed a portion of September 2019's dividend declarations when the data was originally reported, where revisions like these are rare events. Having caught those numbers up now, let's turn our attention to October 2019's dividend metadata and how it changed from the revised September 2019 figures and also how it changed from the October of a year earlier.

  • A total of 3,192 U.S. firms declared dividends in October 2019, a decrease of 828 from the 4,020 recorded in September 2019. That figure is also 462 lower than what was recorded a year ago in October 2018.
  • 41 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in October 2019, an increase of 17 over the number recorded in September 2019 and an increase of 3 over the number recorded a year ago in October 2018.
  • 152 U.S. firms announced they would boost cash dividend payments to shareholders in October 2019, an increase of 85 over the number recorded in September 2019, and a decrease of 20 from the 172 dividend rises declared back in October 2018.
  • A total of 17 publicly traded companies cut their dividends in October 2019, a decline of 12 from the 29 recorded in September 2019 and also an increase of 4 over the 13 recorded in October 2018.
  • 2 U.S. firms omitted paying their dividends in October 2019, a decrease of 6 from the number recorded in September 2019. That figure is also the same as the total recorded in October 2018.

That's what the data for dividends looks like when we look backwards toward the past, assuming S&P's data for October 2019 is complete. Later this week, we'll show you how the future expectations for the dividends of S&P 500 firms have changed since early September 2019!

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 1 November 2019.

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