Dividends By The Numbers In June 2020 And 2020-Q2

Let's next identify the economic sectors that bore the brunt of the Coronavirus Recession's distressed business conditions that led to dividend cuts during the second quarter of 2020. The following chart reveals both the breadth of affected industries and the most negatively impacted among them:

(Click on image to enlarge)

Sampled Dividend Cuts in U.S. by Industrial Sector, 2020-Q2

The oil and gas sector saw the most dividend cuts in our sampling of 260 of 2020-Q2's dividend cutting firms. The outlook for this sector was already damaged coming into the quarter because of the Russia-Saudi Arabia oil price war in 2020-Q1, but was made worse by the business closures ordered by state and local governments in the U.S. and also their orders for residents to stay-at-home during much of the quarter. The combined effect of these measures greatly reduced demand for oil and gas products, which reduced revenues, earnings, and cash flows in this sector of the economy, which is what precipitated its dividend reductions.

Those same factors affected every other listed industrial sector in the chart, particularly hotel, restaurants, and retail-oriented businesses, which encompasses many of the dividend cutting firms contained within the next two categories of Real Estate Investment Trusts (REITs) and consumer-oriented businesses.

The financial services sector and banks were also whacked, as were some of the heavy manufacturing-oriented firms that fall in the industrial category. The apparel sector rounds out the sectors with double-digit numbers of firms announcing dividend cuts, which was primarily affected by the coronavirus epidemic-driven closure of retail outlets in much of the U.S.

Previously on Political Calculations

We've been listing the firms that have announced dividend cuts or suspensions from our near real-time sampling of these declarations in our previous editions. Follow these links to see them all...

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