August 2023's dividend metadata continues to provide evidence of what might best be described as a slow motion recovery from the U.S. stock market's 2022 earnings recession.
In the latest example of what has become a somewhat consistent theme since March 2023, Standard & Poor's monthly data continues to show two main trends for the U.S. stock market:
- A falling trend for the number of firms announcing dividend decreases, which is a positive development.
- A falling trend for the number of firms announcing dividend increases, which is not a positive development.
The falling number of dividend decreases is the main indication of a recovery in progress. We think the falling number of dividend increases may best be understood as a continuing reaction to the persistent effects of the high inflation of 2021 and 2022. It is one of the consequences of their sustained higher cost of doing business, which has not yet stabilized enough to mark the end of the falling year-over-year trend for dividend increases.
Here's the latest update to our chart tracking the number of dividend increases and decreases reported by S&P from January 2004 through August 2023.
The following table summarizes Standard and Poor's dividend metadata for August 2023, with columns showing how the month's dividend data compares both Month-over-Month (MoM) and Year-Over-Year (YoY):
| Dividend Changes in August 2023 | |||||
|---|---|---|---|---|---|
| Aug-2023 | Jul-2023 | MoM | Aug-2022 | YoY | |
| Total Declarations | 5,309 | 3,951 | 1,358 ▲ | 3,728 | 1,581 ▲ |
| Favorable | 218 | 131 | 87 ▲ | 232 | -14 ▼ |
| - Increases | 134 | 92 | 42 ▲ | 149 | -15 ▼ |
| - Special/Extra | 81 | 34 | 47 ▲ | 74 | 7 ▲ |
| - Resumed | 3 | 5 | -2 ▼ | 9 | -6 ▼ |
| Unfavorable | 17 | 23 | -6 ▼ | 12 | 5 ▲ |
| - Decreases | 15 | 23 | -8 ▼ | 12 | 3 ▲ |
| - Omitted/Passed | 2 | 0 | 2 ▲ | 0 | 2 ▲ |
The most notable development in August 2023's dividend metadata is that Standard and Poor is reporting a non-zero number of firms declaring they will omit (or suspend) their dividends for the first time since June 2021. This development suggests S&P may have finally fixed whatever glitch they've had that resulted in their not counting the small number of dividend omissions that were declared during last two years.
Our sampling of August 2023's unfavorable dividend actions includes 11 of the 17 announced decreases and omissions. Once again, the oil and gas industry contributed the highest share of any industrial sector for the month. However, at five firms, the number of dividend decreases for this sector falls well within the background noise range we expect for the oil and gas industry given that most of these firms pay variable dividends that are directly affected by how the price of oil has changed in recent months.
Meanwhile, the remaining six firms announcing dividend decreases in August 2023 hail from five other market sectors, including industrials, shipping, consumer goods, banks and real estate. Here are the firms included in our sampling for August 2023, clicking the links for the firm's names will take you to our source indicating the reduced or omitted dividend for it:
- Pioneer Natural Resources (Hybrid) ( NYSE: PXD)
- Ardmore Shipping (Fixed) (NYSE: ASC)
- Camping World Holdings (Fixed) (NYSE: CWH)
- Devon Energy (Fixed) (NYSE: DVN)
- Icahn Enterprises (Fixed) (NASDAQ: IEP)
- TXO Partners (Variable) (NYSE: TXO)
- Chesapeake Granite Wash Trust (Variable) (NYSE: CHKR)
- Farmer's Bank of Appomattox (Fixed) (NYSE: FBPA)
- Chicago Rivet & Machine (Fixed) (NYSE: CVR)
- Medical Properties Trust (REIT-Healthcare) (Fixed) (NYSE: MPW)
- Mesa Royalty Trust (Variable) (NYSE: MTR)
That's it for this edition of our Dividend by the Numbers series! Next month's edition will present the data for September 2023 and tally up the dividend numbers for the third quarter of 2023.
References
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 31 August 2023.
Image credit: Photo by Susan Q Yin on Unsplash.