- Dividend Cuts by S&P 500 companies during the coronavirus have been far less than what was predicted just a month ago.
- From March 1 through April 17, only 27 companies in the S&P 500 announced dividend suspensions or cuts.
- Dividends remain an important linchpin connecting major corporations and income-hungry investors.
- We forecast total S&P 500 dividend payments will fall in the range of 10-15%, far less than Wall Street expectations.
Dividend announcements were slow last week. They will speed up in late April through May. Here are the most recent overall dividend data.
Dividend Actions by S&P 500 Companies
March-April 17, 2020
March-April 17, 2020
The number of companies increasing their dividends since March 1 grew to 96, with two important companies, Johnson and Johnson (JNJ) and Procter and Gamble (PG), hiking payouts approximately 6%. The star of the week was Skyworks Solutions (SWKS), who raised its dividend an eye-popping 57%. While 27 S&P 500 companies have announced dividend cuts, most of these were smaller companies with modest dividends. So far, the 96 companies that have raised their dividends, have pushed total dividends paid for the period modestly ahead of the same period last quarter.
We believe more cuts are inevitable as companies are forced to take government bailouts in the months ahead. However, we believe total dividend cuts by S&P 500 companies will be far less than the 25%-30% levels predicted just a month ago, perhaps less than half that number.
Next time we'll list companies that have announced dividend cuts, and list a group of companies that our research suggests are in danger of lowering or eliminating their dividends.
Donaldson Capital Management
