Second-Quarter Dividends Fall

Second-Quarter Dividends Fall

over 3 years ago2 mins

Dividends – shambling through this weird apocalypse we call 2020 as clumsily as the rest of us – fell by the largest amount since records began last quarter. Gaaaaaaains 🏋️‍♀️

What does this mean?

While second-quarter dividends still added up to almost $400 billion, that was – according to investment manager Janus Henderson – the second-lowest quarterly total since 2012. That’s due to a 19% quarterly decline versus the year before. And that's due to the 27% of companies that cut their dividends, half of which suspended them altogether…

Source: Business Wire
Source: Business Wire

As the home of the world’s biggest stock market, US dividends were investors’ focus. But the UK and Europe had their fair share of trouble too: their payouts fell by around 40%, while France – the eurozone’s biggest source of dividends – saw its total fall to its lowest level in ten years 💶 Trust Switzerland and Japan to make it through in one piece: both countries’ dividends barely changed.

Why should I care?

When you buy a stock, you take on the risk it’ll fall in value. Things like dividends and share buybacks, then, are a couple of ways companies reward you for taking a chance on them rather than almost-risk-free investments like government bonds 🤷‍♂️ But with dividends dwindling and last quarter’s US share buybacks nearly halving, you mightn’t want to rely on just a company's share price rise to make a profit – especially while stocks are at record highs.

Daily Brief Image

One of US stocks’ biggest critics in the investment world had a change of heart this week: he no longer reckons they’re worth ditching right now, partly because unlimited central bank support is keeping valuations propped up 🏦 But it’s not like investors were paying much attention to his take or to dividends’ turmoil anyway: they’ve been buying up stocks in their droves.

Daily Brief Image
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG