Unexpectedly Intriguing!
02 July 2021

Going by the U.S. stock market's dividends, both June 2021 and the second quarter of 2021 registered robust growth.

The following chart shows the market's dividend increases and decreases from January 2004 through June 2021:

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

Here is the U.S. stock market's dividend metadata for June 2021:

  • 2,723 U.S. firms declared dividends in June 2021, an increase of 870 over the total recorded in May 2021. That figure is also a decrease of 1,294 from the 4,017 recorded in June 2020.
  • Some 59 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in June 2021, an increase of 12 over the number recorded in May 2021 and an increase of 46 over the 13 recorded in June 2020.
  • Standard and Poor counted 81 U.S. firms announcing dividend rises in June 2021, a decline of 67 from the 148 recorded in May 2021, and an increase of 7 over the 74 recorded in June 2020. The reduction from May 2021 was expected, because of the seasonal pattern where June is typically the month that records the second-lowest number of dividend increases during the year. The month that typically sees the fewest dividend increases is September.
  • A total of 6 publicly traded companies cut their dividends in June 2021, the same as the number recorded in May 2021 and also a decrease of 65 from the 71 recorded in June 2020. With so few dividend cuts during the month, we're going to omit listing them, but will note that most occurred with firms who pay variable dividends. Overall, the low total for the month is consistent with robust economic growth.
  • One U.S. firm omitted paying their dividend in June 2021, an increase of one over the zero firms that suspended paying their dividends in May 2021. That figure is also a decrease of 26 from the 27 recorded in June 2020.

Looking at the quarterly data, with just 28 dividend cuts, 2021-Q2 saw 31 fewer dividend reductions than the first quarter of 2021, confirming the continuing improvement for the U.S. economy.

Speaking of which, for 2021-Q2, 384 firms increased their dividends, down 242 from 2021-Q1 when many firms turned their dividends back on or raised them as the U.S. economy continued gaining strength after exiting the coronavirus recession. Although the National Bureau of Economic Research will be the final arbiter for determining when that recession ended, the dividend metadata suggests that event occurred during 2020-Q3.

Reference

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 1 July 2021.

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