A Moderate Pace of Dividend Cuts To Date in 2019-Q4

Nearly at the midpoint of the quarter, Political Calculations’ near real-time sampling of dividend declarations from data published by Seeking Alpha and the Wall Street Journal indicates that 2019-Q4 is looking very much like 2018-Q4, just under in the count of dividend cuts announced in the quarter to date at this point.

44 calendar days into the fourth quarter of 2019, we’ve counted 29 dividend cut announcements, which compares with 27 in 2019-Q4, 35 in 2019-Q2, and 20 in 2019-Q3.

Breaking the dividend cut data down by type of payer, we find 18 firms that pay variable dividends make the list, predominantly from the oil and gas sector of the economy.

• BP Prudhoe Bay Royalty Trust (NYSE: BPT)
• MV Oil Trust (NYSE: MVO)
• Sabine Royalty Trust (NYSE: SBR)
• Dorchester Minerals (NASDAQ: DMLP)
• Permianville Royalty Trust (NYSE: PVL)
• Permian Basin Royalty Trust (NYSE: PBT)
• PermRock Royalty Trust (NYSE: PRT)
• VOC Energy Trust (NYSE: VOC)
• CVR Partners (NYSE: UAN)
• SandRidge Mississippian Trust II (NYSE: SDR)
• SandRidge Permian Trust (NYSE: PER)
• SandRidge Mississippian Trust I (NYSE: SDT)
• Viper Energy (NYSE: VNOM)
• Pacific Coast Oil Trust (NYSE: ROYT)
• Carlyle Group (NYSE: CG)
• North European Oil Royalty Trust (NYSE: NRT)
• ECA Marcellus Trust I (NYSE: ECT)
• Sturm Ruger (NYSE: RGR)

Overall, fourteen of these firms are in the oil and gas sector, while the remaining four represent the mining, chemical, finance, and manufacturing industries.

Meanwhile, there have been 10 firms that set their dividends independently of their revenues and earnings act to cut their dividends through this point of 2019-Q4.

• Oritani Financial (NYSE: ORIT)
• Quad/Graphics (NYSE: QUAD)
• Bluegreen Vacations (NYSE: BXG)
• Fluor (NYSE: FLR)
• Colony Credit Real Estate (NYSE: CLNC)
• Falcon Minerals (NYSE: FLMN)
• Realogy (NYSE: RLGY)
• Whiting USA Trust II (NYSE: WHZT)
• Nielsen Holdings (NYSE: NLSN)
• Colony Credit Real Estate (NYSE: CLNC)
• Garrison Capital (NASDAQ: GARS)

Unlike the variable dividend payers, there are only two firms from the oil and gas sector. The financial sector, in which we include real estate industry-related firms, accounts for four of this category of dividend payers, while the services, consumer goods, mining, and media industries each have one representative.

All in all, we find the total number of dividend cuts so far in 2019-Q4 indicates the overall U.S. economy is relatively healthy, although the oil and gas industry and the manufacturing industries bear watching, the latter due primarily to the sustained global downturn in the automotive industry, and also the prolonged period for which Boeing has been unable to deliver its 737 MAX aircraft to its airline customers.