Unexpectedly Intriguing!
03 June 2021

May 2021 continued the strong environment of the last few months for the U.S. stock market's dividend payers.

The easiest way we've found to measure the relative health of the U.S. stock market is to simply count the number of dividend cuts each month. Since 2012, with the arrival of a large number of variable dividend payers, we've found that if the number of dividend cuts and omissions is below 50 per month, the business environment for the firms listed on the U.S. stock market can be considered relatively healthy. If the monthly number of dividend cut declarations rises above 50, that's a very good indication that recessionary conditions are present within the U.S. economy. We can then can identify which industries are seeing the most distress during those periods by seeing which companies are announcing dividend cuts.

With that threshold in mind, we're now seeing perhaps the strongest environment for dividend paying stocks in the last 10 years, as defined by the relative absence of dividend cuts.

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

Here's the rest of May 2021's dividend metadata, complete with comparison to April 2021 and the year-over-year change from May 2020, which marked the bottom of the coronavirus recession for dividend cuts.

  • 1,853 U.S. firms declared dividends in May 2021, a decline of 166 from the 2,019 recorded in April 2021. That figure is also a decrease of 1,265 from the 3,118 recorded in May 2020.
  • Some 47 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in May 2021, an increase of 8 over the number recorded in April 2021 and an increase of 25 over the 22 recorded in May 2020.
  • Standard and Poor counted 148 U.S. firms announcing dividend rises in May 2021, a decline of 7 from the 155 recorded in April 2021, and an increase of 83 over the 65 recorded in May 2020.
  • A total of 6 publicly traded companies cut their dividends in May 2021, a decline of 10 from the 16 recorded in April 2021 and also a decrease of 108 from the 114 recorded in May 2020.
  • One U.S. firm omitted paying their dividends in May 2021, the same as the number recorded in April 2021. That figure is also a decrease of 152 from the 152 recorded in May 2020.

Our sampling of dividend cuts from our real-time sources of dividend declarations for May 2021 captured 67% of all the cuts announced during the month. Which is to say four of the six:

We note that two of the four in our sample are oil royalty trusts that pay variable dividends from month to month, which falls well within the typical level of noise we see for these firms during periods of relative health for the U.S. economy. In this case, that comparative health is driven mainly by the lifting of coronavirus pandemic lockdown mandates in much of the country.

Update 6 June 2021: A reader alerts us the article reporting a 75% dividend cut for Mosaic (also linked above) is in error. We've confirmed that Mosaic increased its regular dividend from its previous level of $0.050 per share to $0.075 per share in June 2021.

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 28 May 2021.

Seeking Alpha Market Currents. Filtered for Dividends. [Online Database].

Wall Street Journal. Dividend Declarations. [Online Database when searched on the Internet Archive].

Labels:

About Political Calculations

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!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

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

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Archives
Legal Disclaimer

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.