How Did Dividends Perform In January?

|
Posted: Feb 04, 2020 12:26 PM
How Did Dividends Perform In January?

"Meh". If you wanted to use a single word to describe the metadata for dividends being paid in the U.S. stock market in January 2020, "meh" wouldn't be a bad choice, as the month was neither really good nor really bad, but for lack of a better word, it was "meh" all over.

On the good side, the number of companies acting to reduce their dividends fell both month-over-month and year-over-year, but on the bad side, the number of companies acting to increase their dividends did the same in January 2020, continuing a lackluster trend that began in 2019. The chart below shows the number of dividend rises and cuts announced in each month for the U.S. stock market from January 2004 through January 2020:

Let's go through the dividend metadata for January 2020:

  • A total of 2,705 U.S. firms declared dividends in January 2020, a decrease of 2,401 from the 5,106 recorded in December 2019. That figure is also an increase of 229 over the number recorded a year ago in January 2019.
  • 31 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in January 2020, a decrease of 104 from the number recorded in December 2019 and 6 lower than what was recorded a year ago in January 2019.
  • 191 U.S. firms announced they would boost cash dividend payments to shareholders in January 2020, an increase of 65 over the number recorded in December 2019, and a decrease of 26 from the 217 dividend rises declared back in January 2019.
  • A total of 25 publicly traded companies cut their dividends in January 2020, a decline of 1 from the 26 recorded in December 2019 and also a decrease of 2 from the 27 recorded in January 2019.
  • 0 U.S. firms omitted paying their dividends in January 2020, a decrease of 1 from the number recorded in December 2019. That figure is also a decrease of 2 from the total of 2 firms that omitted paying dividends back in January 2019.

There's nothing really exciting here at all, but the falling numbers for dividend increases in recent months suggest a stock market that's running out of steam. "Meh" may be the best-case scenario for this point in 2020.