According to the research data published dividend payouts in the US dropped $42.5 billion in Q2 2020 as compared to the previous year. This was the biggest drop since 2009 when payouts declined by $43.8 billion due to the Great Recession.
Dividend increases during the quarter totaled $6.7 billion, a drop of 45.7% from Q2 2019. Decreases however recorded a mind-blowing increase of 1,156%, amounting to $49.2 billion for the same period.
Worst Performance Since Great Recession
On a global scale, dividend payouts declined 22% in Q2 2020, once again, the highest quarterly decline since 2009.
According to the Janus Henderson Index, the drop amounted to $108.1 billion, bringing the total to $382.2 billion. This was the worst performance of any Q2 since 2012.
Global Dividend Payouts Decrease $108.1B While S&P 500 Companies Increase Cash Holdings By $250B
During the same period, S&P 500 companies, except those in finance, increased cash holdings by $250 billion. Their total dividend payouts totaled $119 billion, down 6.2% from Q1 2020.
- 380 out of the 500 companies paid put dividends, down from 413 companies in Q1.
- Payment per share declined 6.4% from $15.32 in Q1 to $14.35 in Q2.
- Earnings on the other hand plummeted -33.8% during the period according to Factset.
- This was the highest year-on-year decline in earnings since 2009 when there was a -35.4 drop.
Regionally, Europe and the UK were the worst performers in terms of dividend payouts.
According to the UK Dividend Monitor published by Link Asset Services, there was a drop of 57.2% during Q2 2020. 75% of dividend payers in the UK either cancelled dividends or cut them in what was the largest Q2 decline since 2010 and the largest yearly drop on record. For the first time since 2010, UK-based energy giant BP cut dividend payouts by 50%.