S&P Dow Jones Indices Reports $5.5 Billion Decrease in U.S. Indicated Dividend Payments for Q1 2020; Worst Quarter since Q1 2009

  • The Good: Total S&P 500® Q1 2020 dividend payments set a record, increasing 8.2% over Q1 2019 to $127.0 billion, up from Q1 2019’s $117.3 billion.
  • The Bad: Thirteen issues decreased or suspended their forward rate by $13.9 billion in March with additional cuts on the way.

NEW YORK, April 9, 2020: S&P Dow Jones Indices announced today that indicated dividend net changes (increases less decreases) for U.S. domestic common stocks declined $5.5 billion during Q1 2020, compared to a gain of $11.8 billion in Q1 2019.  This is the first quarterly decline since Q2 2009’s $4.9 billion and the worst since Q1 2009’s $43.8 billion decrease, $38.7 billion of which was in the S&P 500, when big-banks and General Electric reduced their payments. 

For Q1 2020, aggregate increases amounted to $12.4 billion, down 24.7%, from Q1 2019’s $16.5 billion. Aggregate dividend cuts increased 278% to $17.96 billion from $4.75 billion for Q1 2019.

For the 12-months ending in March 2020, net dividends rose $28.2 billion, compared to a gain of $51.3 billion for the 2019 period, as increases were $52.5 billion versus $63.1 billion, and decreases were $24.4 billion compared to $11.8 billion for the prior period.  

“Dividends had a good run, culminating with a record payment in Q1 2020, as shareholders reaped the benefits of a ten-year bull market,” said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. “March, however, gave a glimpse of what Q2 may be like as dividend cuts and suspensions started to be announced. For 2020, liquidity and cost control are now the top priority, with dividends lowered and buybacks an endangered species.” 

Silverblatt continued, The full impact of these cuts will soon be felt as fewer and smaller dividend checks are sent out. At this point, the depth of the cuts is dependent on the COVID-19 economic impact. Until we understand its full extent, companies may be forced to take prudent measures.” 

Silverblatt concluded, “At the start of the year, projections were for a double-digit dividend payment gain – now the concern is for a double-digit decline.  The bottom-line is that it was a good run, and eventually we’ll get back to it; we just have to hang on until then.” 

S&P 500 Dividends

On a per share basis, S&P 500 Q1 2020 dividend payments for the S&P 500 increased 9.6% to a record $15.32, up from the prior record in Q4 2019 of $15.21, and up from Q1 2019’s $13.98. On an aggregate basis, index components paid $127.0 billion in dividends in the quarter, up from the $117.3 billion in Q1 2019.  For the 12-month period ending in March 2020, the index paid a record $59.58 per share, up from the 2019 period’s $54.94, with an aggregate $495.1 billion to shareholders, compared to $464.5 billion.

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