If you looked just at dividend rises and cuts, December 2020 would appear to be a pretty healthy month for the U.S. stock market. But one key measure of stock market health fell far short of every other December on record during the previous 16 years: extra, or dividends.
These are the bonus dividend payments that companies sometimes make to their shareholding owners, often at the end of a calendar year when they've had exceptionally strong earnings. 2020 was not that kind of year for the bulk of publicly traded firms in the U.S.
We've tallied up December 2020's number of firms announcing dividends, including the number of increases, reductions and omissions (or suspensions), along with the month's extra dividend total for extra dividend payments, where only this figure stands apart from all the other data that suggests strong year-ending results for the stock market.
- 3,557 U.S. firms declared dividends in December 2020, an increase of 432 over the 3,125 recorded in November 2020. That figure is also 1,549 lower than what was recorded a year ago in December 2019.
- Only 13 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in December 2020, a decrease of 65 from the number recorded in November 2020 and 122 lower than what was recorded a year ago in December 2019. This figure is extremely low compared to all other Decembers on record from 2004 through 2019, where the second smallest total is 2019's 135. By contrast, the best December on record for extra dividends was 2012, when 483 firms paid a special dividend as part of the Great Dividend Raid event.
- 147 U.S. firms announced they would boost cash dividend payments to shareholders in December 2020, an increase of 22 over the number recorded in November 2020, and an increase of 21 over the total recorded in December 2019.
- A total of 24 publicly traded companies cut their dividends in December 2020, an increase of 9 over the number recorded in November 2020 and also a decrease of 2 from the 26 recorded in December 2019.
- Three U.S. firms omitted paying their dividends in December 2020, an increase of 2 over the number recorded in November 2020. That figure is also an increase of 2 over the total recorded in December 2019.
Focusing on ordinary dividends, the following chart shows the number of increases and decreases announced each month from January 2004 through December 2020.
December marked the end of 2020-Q4, so let's tally up the totals for the U.S. stock market's dividend metadata, covering increases, decreases, and extra dividends:
- 457 firms announced they would increase their dividends during 2020-Q4, up 245 from 2020-Q3, but only up 29 from 2019-Q4.
- Some 52 companies announced they would reduce their dividends, down 10 from 2020-Q3's total of 62, and down 15 from 2019-Q4's total of 67.
- There were 124 extra dividends announced during 2020-Q4. That total is double the 62 announced in the preceding quarter, but is down by more than half of the 253 announced a year earlier in the fourth quarter of 2019.
Since we're at the end of the calendar year, let's also run through the annual numbers:
- 2020 saw the declaration of 1,483 dividend rises, which is down 325 from 2019's 1,808.
- There were 526 dividend cuts announced in 2020, up 217 from the 309 recorded in 2019. This number is also just one shy of the record 527 dividend cuts recorded in the recession year of 2009.
- 334 U.S. firms announced they would pay extra, or special dividends to their shareholders in 2020. This figure is down 213 from 2019's total of 547 extra dividends.
We make a point of focusing on dividend cuts, because this data tells us which industries are experiencing the greatest level of distress in the U.S. economy. We sample this data from Seeking Alpha's dividend news and the Wall Street Journal's dividend declarations database.
There were just nine firms in our sample during December 2020. Three hail from the oil and gas industry, three are Real Estate Investment Trusts (REITs), and there are one each from the banking, consumer goods, and chemical industries. Here is the short list for the month, where we're not distinguishing between firms that pay variable dividends and firms that set their dividends independently of their earnings and cash flow:
- Crazy Woman Creek Bancorp (OTC: CRZY)
- AMEN Properties (OTCPK: AMEN)
- Greif (Class B) (NYSE: GEF.B)
- Paramount Group (REIT-Office) (NYSE: PGRE)
- Trinseo S.A. (NYSE: TSE)
- Alexander & Baldwin (REIT-Diversified) (NYSE: ALEX)
- San Juan Basin Royalty Trust (NYSE: SJT)
- Permian Basin Royalty Trust (NYSE: PBT)
- AG Mortgage Investment Trust (REIT-Mortgage) (NYSE: MITT)
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. Please follow these links to see all the dividend cuts and suspensions we've tracked during the coronavirus recession.
- Dividends by the Numbers in March 2020 and 2020-Q1
- Dividends by the Numbers in April 2020
- Dividends by the Numbers in May 2020
- Dividends by the Numbers in June 2020 and 2020-Q2
- Dividends by the Numbers in July 2020
- Dividends by the Numbers in August 2020
- Dividends by the Numbers for September 2020 and 2020-Q3
- Dividends by the Numbers in October 2020
- Dividends by the Numbers in November 2020
- Dividends by the Numbers in December 2020 and 2020-Q4
Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. 30 November 2020.
Seeking Alpha Market Currents. Filtered for Dividends. [Online Database].