The second quarter of 2024 has come and gone. It was a surprisingly strong quarter for dividend paying stocks.
That's especially true in year-over-year terms, as more firms announced they were increasing their dividends while fewer firms announced they were decreasing them. Quarter-over-quarter, the picture appears more mixed, but mainly because the seasonal pattern in which the first quarter typically sees the most dividend rises.
However, that seasonal pattern doesn't hold for dividend decreases. 2024-Q2 saw significantly fewer reductions than were recorded in 2024-Q1, confirming the relative strength of the U.S. stock market during the period from April through June 2024.
Here's our chart visualizing the number of U.S. firms increasing and decreasing their dividends by quarter. The chart spans the last five quarters from the year ago calendar quarter of 2023-Q2 through the just completed quarter of 2024-Q2.
Focusing now just on June 2024, we once again find the year-over-year comparison with June 2023 is favorable. More firms announced dividend increases and fewer firms announced unfavorable changes in dividends. The month-over-month data appears mixed, but that's mainly because of the seasonal pattern in which the month of June typically records the fewest dividend increases of the year.
The following chart tracks the number of announced increases and decreases in U.S. stock market dividends in each month from January 2004 through June 2024.
The following table summarizes Standard and Poor's dividend metadata for June 2024, revealing how it compares both Month-over-Month (MoM) and Year-Over-Year (YoY) with previously reported data:
| Dividend Changes in June 2024 | |||||
|---|---|---|---|---|---|
| Jun-2024 | May-2024 | MoM | Jun-2023 | YoY | |
| Total Declarations | 5,293 | 4,419 | 874 ▲ | 4,904 | 389 ▲ |
| Favorable | 113 | 245 | -132 ▼ | 100 | 13 ▲ |
| - Increases | 74 | 155 | -81 ▼ | 58 | 16 ▲ |
| - Special/Extra | 39 | 90 | -51 ▼ | 41 | -2 ▼ |
| - Resumed | 0 | 0 | 0 ◀▶ | 1 | -1 ▼ |
| Unfavorable | 4 | 11 | -7 ▼ | 15 | -11 ▼ |
| - Decreases | 4 | 11 | -7 ▼ | 15 | -11 ▼ |
| - Omitted/Passed | 0 | 0 | 0 ◀▶ | 0 | 0 ◀▶ |
If you need to condense all this information into a single number to determine whether June 2024 was a good or bad month for dividend paying firms, you can find it by taking the number of favorable changes and subtracting the number of unfavorable changes for the month. For June 2024, we find 113 favorable changes and 4 unfavorable changes, giving us a net difference of +109 after the math. This positive result confirms June 2024 as a positive month for dividend paying stocks, especially when compared year-over-year with June 2023's result of +85.
As we close, we find there is a bearish storm cloud potentially developing in the U.S. stock market, which can be found in the earnings per share data for 2024-Q2 for the S&P 500 (Index: SPX). When we last looked at the index' projected earnings per share data six weeks ago, it appeared to be on track to complete the S&P 500's full recovery from its 2022 earnings recession in June 2024. However, S&P reports the index' earnings per share in 2024-Q2 came in less than what it recorded in 2024-Q1.
It's too early to tell if more negative changes for earnings lie ahead. But at a minimum, it means the full recovery from the S&P 500's 2022 earnings recession has been delayed for at least another quarter.
References
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 1 July 2024.
Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a celebrating Wall Street bull that is nervously looking at a storm cloud that looks like a bear".