Dividends by the Numbers in October 2021

The U.S. stock market showed continuing strength in October 2021. Indices like the S&P 500 closed the month at a new record high, but more tellingly, the market saw U.S. firms increasing dividends with comparatively few companies acting to cut them.

Here is the official metadata describing the number of dividend declarations, special dividends, increases, decreases and omissions for October 2021:

• 5,147 U.S. firms declared dividends in October 2021, a decline of 58 from the 5,205 recorded in September 2021. That figure is also an increase of 2,115 over the 3,032 recorded in October 2020.
• Some 59 U.S. firms announced they would pay a special (or extra) dividend to their shareholders in October 2021, an increase of 5 over the number recorded in September 2021 and an increase of 26 over the 33 recorded in October 2020.
• Standard and Poor counted 162 U.S. firms announcing dividend rises in October 2021, an increase of 92 over the number recorded in September 2021 and a decrease of 23 from the 185 recorded in October 2020.
• A total of 19 publicly traded companies cut their dividends in October 2021, an increase of 11 over the number recorded in September 2021 and also an increase of 6 over the 13 recorded in October 2020.
• Zero U.S. firms omitted paying their dividends in October 2021, the same as in September 2021. That figure is also a decrease of one from October 2020′s total.

While the overall picture for dividend paying firms indicates October 2021 was a period of relative strength for the U.S. stock market, there is a developing cause for concern. The number of firms announcing dividend cuts during the month is the highest since January 2021. That change points to the development of a less positive business environment in recent months, which is starting to show up in the stock market’s dividend data.

The number of firms acting to cut their dividends is perhaps the simplest near-real time indicator of the relative health of the U.S. economy. Paying attention to it can tell you a lot about the outlook for U.S. businesses. Stay tuned!

Reference

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 1 November 2021.