Dividends By The Numbers In December 2023 And 2023-Q4

rolled banknotes

Image Source: Unsplash
 

2023 has come to an end, leaving behind a mixed legacy.

For dividend-paying stocks, December 2023 was representative of 2023 as a whole. There was good news in that the number of unfavorable changes were down, month-over-month, quarter-over-quarter, and year-over-year. But there was also bad and mixed news. The number of dividend increases was also down month-over-month and year-over-year, representing a negative development for investors. However, that situation was mitigated by the number of dividend increases rising quarter-over-quarter in 2023-Q4.

Let's get straight to the numbers. The following table presents Standard and Poor's dividend metadata for December 2023. It summarizes how the month's dividend data compares in both Month-over-Month (MoM) and Year-Over-Year (YoY) terms with previously reported data:

Dividend Changes in December 2023
   Dec-2023  Nov-2023    MoM  Dec-2022    YoY
Total Declarations 5,405 3,822 1,583 ▲ 5,528 -123 ▼
Favorable 239 264 -25 ▼ 281 -42 ▼
- Increases 121 161 -40 ▼ 144 -23 ▼
- Special/Extra 118 103 15 ▲ 135 -17 ▼
- Resumed 0 0 0 ◀▶ 2 -2 ▼
Unfavorable 8 15 -7 ▼ 31 -23 ▼
- Decreases 8 15 -7 ▼ 31 -23 ▼
- Omitted/Passed 0 0 0 ◀▶ 0 0 ◀▶

Now, let's visualize that data, starting with the number of dividend rises and decreases reported each month over the last 20 years to put these numbers into their long term context.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 - December 2023

The next chart focuses on just the last five quarters, spanning from 2022-Q4 through 2023-Q4. This presentation makes it easier to see the downward trends in the year-over-year figures for dividend increases and also the improving trend for dividend decreases.

Number of U.S. Firms Increasing and Decreasing Dividends by Quarter, 2022-Q4 through 2023-Q4

Our sampling of December 2023's unfavorable dividend actions found 14 firms announcing decreases in dividend payments to their shareholding owners. Six firms announcing dividend decreases in December 2023 represent the real estate industry, the largest share of any industrial sector, which makes sense given that sector has been hammered throughout 2023 by rising interest rates in the U.S. The oil and gas industry contributed the second-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.

The remaining three firms in the sampling hail from the manufacturing, packaging (consumer cyclical), and banking industries.

We've tallied up the number of dividend cuts by industrial sector from our monthly sampling over the fourth quarter of 2023 in the next chart:

Sampled Dividend Decreases in U.S. by Industrial Sector during 2023-Q4

Dividend reductions in the real estate sector outnumbered those in the oil and gas industry. That's remarkable because many of the firms that saw decreased dividend payments for shareholders in oil and gas industry pay variable dividends on a monthly basis. Never-the-less, the concentration of dividend decreases in the real estate sector points to the outsize effect the Federal Reserve's series of interest rate hikes from March 2022 through July 2023 in negatively impacting the sector, which we should note also negatively affected the banking industry.

2024 promises to see the Federal Reserve swing into reverse and cut interest rates instead, which bodes better for banks and the real estate industry. That anticipated change has the potential to improve the outlook for firms in these sectors and return them to the ranks of firms increasing their dividends.
 


References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 1 January 2024.


More By This Author:

S&P 500 Falls Short Of Reaching New High As 2023 Ends And 2024 Begins
Your Paycheck In 2024
What's Your U.S. Income Percentile?

Disclosure: Materials that are published by Political Calculations can provide visitors with free information and insights regarding the incentives created by the laws and policies described. ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Or Sign in with