September 2020 continued the positive trend established in the two preceding months of July and August for dividend paying firms in the U.S. stock market.
Here is the dividend metadata for the month of September 2020:
- A total of 3,598 U.S. firms declared dividends in September 2020, an increase of 370 over the 3,228 recorded in August 2020, but a decrease of 422 with respect to the number of dividend declarations issued recorded in September 2019.
- Eighteen U.S. firms announced they would pay a special (or extra) dividend to their shareholders in September 2020, a decrease of one from the number recorded in August 2020 and six lower than what was recorded a year ago in September 2019.
- 61 U.S. firms announced they would boost cash dividend payments to shareholders in September 2020, a decrease of 20 from the 81 recorded in August 2020, and a decrease of six from the 67 dividend rises declared back in September 2019. As a general rule, September represents the month most likely to record the lowest number of dividend rises of any month in any given year.
- A total of 12 publicly traded companies cut their dividends in September 2020, a decline of 11 from the 23 recorded in August 2020 and also a decrease of 17 from the 29 recorded in September 2019.
- 18 U.S. firms omitted paying their dividends in September 2020, an increase of seven over the number recorded in August 2020. That figure is also an increase of 10 over the total recorded in September 2019.
The following chart adds September 2020's number of dividend increases and decreases to the ongoing series of data reported by Standard and Poor since January 2004. Please click here to access a large version of the chart.
Three solid months make for a solid quarter for the U.S. stock market's dividend payers. We put together the following quick sums to compare the dividend metadata for the good quarter of 2020-Q3 with the worst-ever quarter that immediately preceded it for comparison:
- In 2020-Q3, publicly-traded U.S. firms issued 10,049 declarations about their dividend policies. That total was 228 fewer than the 10,277 declarations issued in 2020-Q2.
- 62 firms announced they would pay an extra, or special, dividend to their shareholders during 2020-Q3. By comparison, just 46 firms found enough cash to make it worthwhile enough to make an extra dividend payment to their shareholding investors in 2020-Q2.
- A total of 212 companies announced they would increase their dividends during 2020-Q3, up 20 from the 192 that did in the preceding quarter of 2020-Q2.
- 35 firms announced they would resume paying dividends after having previously suspended them, an increase of 27 over the total of 8 that did during 2020-Q2.
- S&P recorded some 62 firms announcing dividend cuts in 2020-Q3. That number was down by 243 from the 305 firms that declared they would act to reduce their dividends in 2020-Q2.
- Meanwhile, 40 firms announced they would suspend, or omit, paying their dividends during 2020-Q3, which is 294 fewer than the 334 that put their dividends on hold in the preceding quarter.
With a quarter-over-quarter improvements like these, it was no wonder that the pace of dividend cuts during 2020-Q3 fell well below the threshold signifying some degree of contraction in the U.S. economy. That's not to say that recessionary conditions were not present, but rather that the U.S. economy likely expanded during the third quarter of 2020. That relative health may be seen in our chart showing the cumulative number of dividend cuts by day of quarter for 2020-Q3, which we've compared with the third quarters of 2017, 2018, and 2019.
2020-Q3 saw more dividend cuts than each of the other historical quarters shown in the chart, but mainly in the first half. After the first half, the pace of dividend cuts slowed considerably, which corresponds with the U.S. economy gaining traction during the second half of the quarter.
Meanwhile, with S&P reporting just 12 dividend cuts in September 2020, our sample of dividend cutting firms is fairly skimpy with half that number turning up in our near real-time sources for dividend declarations. Here is that very, very short list:
- Kimco Realty (REIT-Retail) (NYSE: KIM)
- Gouverneur Bancorp (OTC: GOVB)
- Berkshire Hills Bancorp (NYSE: BHLB)
- Retail Properties of America (REIT-Retail) (NYSE: RPAI)
- Cross Timbers Royalty Trust (NYSE: CRT)
- Granite Point Mortgage Trust (REIT-Mortgage) (NYSE: GPMT)
There's an interesting category of firms we haven't had to deal with much in the past that have begun showing up in our sampling. This category consists of firms that either suspended or omitted paying their dividends, but which have since resumed paying dividends to their shareholders, but at reduced levels compared to what they were paying previously. We'll take a closer look at the firms fitting within this definition on their own in upcoming weeks.
References
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 30 September 2020.
Seeking Alpha Market Currents. Filtered for Dividends. [Online Database].
Wall Street Journal. Dividend Declarations. [Online Database when searched on the Internet Archive].
Labels: dividends
Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:
ironman at politicalcalculations.com
Thanks in advance!
This site is primarily powered by:
CSS Validation
RSS Site Feed
JavaScript
The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.
Other Cool Resources
Blog Roll
Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.
