Unexpectedly Intriguing!
03 February 2021

If you looked just at dividend increases and decreases announced by publicly traded U.S. firms during January 2021, you would think it was a pretty run-of-the-mill month. But something very abnormal appears to have happened in January 2021, where if the reported data is correct, something broke in the U.S. stock market.

Let's get the seemingly normal out of the way first. Here's the latest update to the chart tracking the number of public U.S. firms either increasing or decreasing their dividends each month, which covers the period from January 2004 through January 2021.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 through January 2021

Most investors would take these figures as their topline data for dividend payers in the U.S. stock market, but the dividend metadata shows two categories that were sharply different from every other month in the recorded data series reported by Standard and Poor. Pay close attention to the first two items in the following summary:

  • A total of 1,466 U.S. firms declared dividends in January 2021, a decline of 2,091 from the 3,557 recorded in December 2020. That figure is also a decrease of 1,239 from the 2,705 recorded in January 2020. This is the lowest total for any month on record for Standard and Poor's data series, which extends back to January 2004. It is also substantially less than the previous lowest total of 2,148 reported for January 2010, and the average number of dividends declarations in the month of January averaged 2,598 in the years from 2004 through 2020.
  • Zero U.S. firms announced they would pay a special (or extra) dividend to their shareholders in January 2021, a decline of 13 from the 13 recorded in December 2020 and a decrease of 31 from the 31 recorded in January 2020. This is the first time we've ever seen a null figure reported for extra, or special, dividends announced during a month in 17 years worth of data. To emphasize how abnormal this particular result is, from 2004 through 2020, the average number of special dividend payments announced in the month of January is 43. The previous record low was April 2020's figure of 11 extra dividends, which corresponds with the initial shock of the coronavirus pandemic in the U.S.
  • 174 U.S. firms announced they would boost cash dividend payments to shareholders in January 2021, an increase of 27 over the number recorded in December 2020, and a decrease of 17 from the 191 recorded in January 2020.
  • A total of 32 publicly traded companies cut their dividends in January 2021, an increase of 8 over the number recorded in December 2020 and also an increase of 7 over the 25 recorded in January 2020.
  • 3 U.S. firms omitted paying their dividends in January 2021, the same as the number recorded in December 2020. That figure is also an increase of 3 over the 0 recorded in January 2020.

We used the word "appears" earlier because it is possible that S&P experienced a reporting glitch for these figures. We'll provide an update at the bottom of the article here should January 2021's dividend data be revised.

Focusing now on announced dividend cuts, we found just seven dividend declarations of reduced dividend payments in our near real time news sources. Three are royalty trusts from the oil and gas industry that pay variable dividends, two are REITs, and then there are one bank and one mining firm in January 2021's list:

Following the link for the company name will take you to our source for the dividend reduction news, while clicking the ticker symbol will take you to the firms' latest news and stock price.

Update 2 March 2021: We were right to be suspicious! S&P revised their null entry for extra (or special) dividend payout announcements in January 2021, setting it at a more believable 113 instead. However, the other suspicious number, 1,466 dividend declarations, stands unchanged, marking the lowest figure recorded for declarations in Standard & Poor's published data history. When we post the February 2021 dividend metadata, we'll be referencing the revised figure for January 2021's extra dividends in our analysis.


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