Pace Of 2020-Q2 Dividend Cuts Accelerates

The pace of dividend cuts in the U.S. surged during the past week and a half, where we've added an additional 44 distressed firms either reducing their dividends or suspending payments to our ongoing tally for April 2020.

To put that number in perspective, when recessionary conditions are present in the U.S. economy, we'll see firms announce dividend cuts at a rate of 25 or more during the course of a single month. We now anticipate triple that figure by the time April 2020 is over.

The following chart compares the current pace of dividend cuts during 2020-Q2 to the same quarter in the years 2017, 2018, and 2019, which is the stock market equivalent to those excess mortality charts illustrating the full impact of the COVID-19 coronavirus pandemic.

Cumulative Total of Dividend Cuts in U.S. by Day of Quarter, 2019-Q2 vs 2020-Q2, Snapshot 15 April 2020

 

We confirm the number of dividend cuts and suspensions announced in the quarter to date for our 2020-Q2 sampling is elevated well above the comparatively healthy quarters of 2017-Q2 and 2018-Q2, and is also considerably higher than the year ago quarter of 2019-Q2, when the oil and gas sector of the U.S. economy experienced a relatively short period of distress.

Here is the list of U.S. firms announcing dividend cuts or omitting dividend cuts in the seven trading days since our previous report:

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