Unexpectedly Intriguing!
05 January 2022

The U.S. stock market closed December 2021 with another strong month for dividend paying stocks, which closed a strong quarter, which closed a strong year!

The following chart summarizes that strength as measured by the number of U.S. firms either increasing or decreasing their dividends in each month from January 2004 through December 2021. In it, we find the number of dividend cutting firms in 2021 fell well below the threshold that would indicate recessionary conditions in the U.S. economy.

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

Here is December 2021's metadata describing the number of dividend declarations, special dividends, increases, decreases and omissions:

  • 5,331 firms declared dividends in December 2021, an increase of 190 over November 2021's total and the second highest figure for this category in S&P's data series for U.S. firms, which extends back to January 2004. That figure is also an increase of 1,774 over the 3,557 recorded in December 2020.
  • Some 168 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in December 2021, an increase of 59 over the number recorded in November 2021 and an increase of 155 over the 13 recorded in December 2020.
  • 145 U.S. firms announced dividend rises in December 2021, falling by 45 from the 190 recorded in November 2021 and a reduction of 2 from the 147 recorded in December 2020.
  • A total of 19 publicly traded companies cut their dividends in December 2021, an increase of 7 over the number recorded in November 2021 and also a decrease of 5 from the 24 recorded in December 2020.
  • No U.S. firms omitted paying their dividends in December 2021, the same as in November 2021. That figure represents a year over year decrease of three from December 2020.

Since December 2021 marks the end of 2021's fourth quarter, we visually summarized the quarter's number of dividend increases and decreases in the next chart:

Number of Public U.S. Firms Increasing or Decreasing Their Dividends by Quarter, 2020-Q4 through 2021-Q4

Overall, 2021 was an exceptionally strong year for dividend-paying firms in the U.S. stock market. Perhaps the best indication of how strong can be found in the data for omitted, or suspended, dividend payments compared to previous years, which has barely even been hinted at in our monthly reports for category. 2021 saw a record low total of six U.S. firms announce that they were either suspending or omitting their dividend payments. That's down by 400 from the record high 406 firms that took that action in 2020.

Meanwhile, when we consider the subset of the S&P 500 (Index: SPX), which represents the 505 largest publicly-traded firms in the U.S. stock market according to their market capitalization, the fourth quarter of 2021 saw these firms pay out cash dividends in the amount of $15.78 per share. For the whole of 2021, 394 component firms of the S&P 500 index paid the equivalent of $60.40 per share to their shareholding owners.

All in all, December 2021 was a strong month for dividend paying companies in the U.S. stock market, while 2021 as a whole was a robust year for these firms.

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 3 January 2022.

Standard and Poor. S&P Indicated Rate Change. [Excel Spreadsheet]. Accessed 3 January 2022.

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