Brace Yourself For The Beginning Of The Great Dividend Recession

Last quarter’s dividend statistics are in. The outlook has not improved. With a rising number of companies slashing their payouts, dividend safety is more important than ever.

During the last three months, 158 companies decreased or suspended their dividends. That’s an 85.9% increase from the 85 cuts in the second quarter of last year.

Only 504 companies reported dividend increases. That’s 10.3% fewer companies than the number that raised their payouts during last year’s second quarter.

But these statistics are part of a broader trend. Over the last 12 months, investors lost $20.9 billion in dividend income. That’s a whopping 157% more than the $8.2 billion that was lost last year.

Energy stocks were responsible for 43% of the cuts, thanks to low oil prices. They are also responsible for 71% of the $20.9 billion in forfeited dividends. With oil hovering near $40 a barrel, you can bet on more reductions in the near future.

In companies cut or eliminated their dividends, while just 70 companies raised their payouts. It was the first time that dividend cuts outnumbered increases since the Great Recession.

The bad news keeps coming for dividend investors. Increases are slowing… and safe, growing dividends are getting harder to come by.

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Sam Anwar 5 years ago Member's comment

Most of the dividend decreases/cuts come from companies heavily invested in the energy sector. For this reason, there is skew from one particular sector representing a huge portion of dividend decreases. In addition, I disagree with #Microsoft dividend safety raking on the grounds that a company with a predicted revenue payout ratio of 43%. Also, Microsoft has a AAA credit ranking a significant amount of assets held overseas. $MSFT