Dividend Cuts Continue Torrid Pace In First Half Of May 2020

By Ironman of Political Calculations
Tuesday, May 19, 2020 5:33 AM EDT

Dividend cuts and suspensions announced by publicly-traded firms in the United States are continuing their torrid pace through the midpoint of May 2020, following the worst single month for dividend-paying firms in stock market history.

The following chart shows the number of dividend cuts and suspensions since the beginning of 2020-Q2, which confirms that through the first 15 days of May 2020, there's not yet much sign of slowing.

Cumulative Dividend Cuts and Suspensions in U.S. by Day of Quarter, 2017-Q2 vs 2018-Q2 vs 2019Q2 vs 2020-Q2, Snapshot 15 May 2020

 

Here is the full list of U.S. firms either announcing dividend cuts or suspending their dividends in the first half of May 2020 from our sampling.

In the list, clicking the links for the publicly-traded company names will take you to our source for their dividend cut or suspension announcement. Clicking the ticker symbols will take you where you can find current price and other information related to the particular firm. Since our sources use automated systems to identify firms cutting or suspending their dividends, any errors in the list may be attributed to their methodology for detecting them. At some point, we'll discuss some of the more common errors we run into that arise from the automation in reporting, but that's a discussion for a different day.

Overall, we count 79 dividend cuts and suspensions within our sampling of dividend declarations in the first half of May 2020. We recognize the list includes a number of firms that pay variable dividends linked to their earnings and cash flows, which given the current market environment, is an irrelevant consideration that makes people who quibble over such trivia look incredibly foolish. In the current environment, the dividends for these firms are down because their operating environment has deteriorated since their last dividend distribution, just as it has for the firms that set their dividends independently of their earnings and cash flows who are also announcing dividend cuts and suspensions.

The following chart illustrates where economic distress is being concentrated within the U.S. economy by industrial sector during the first half of May 2020. The chart is impressive for the broad range of distressed industries.

Sampled Dividend Cuts in U.S. by Industrial Sector, 1 May 2020 - 15 May 2020

 

We continue to anticipate the next several months will see elevated number of dividend cuts and suspensions as the impact of the coronavirus pandemic ripples through the global economy.

References

Seeking Alpha Market Currents Dividend News. [Online Database]. Accessed 15 May 2020.

Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 15 May 2020.

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