Chart of the week: corporate America cuts payouts

American companies are slashing their dividends at the fastest rate since 2009. Some 394 companies listed in America lowered their dividends last year.


US companies are slashing their dividends at the fastest rate since 2009, according to Bespoke Investment Group. Some 394 companies listed in America lowered their dividends last year, a 60% increase on the year before. The cuts are the result of "weak commodity prices, sluggish growth dampening corporate profits, and a tightening of credit conditions", says Luke Kawa on Given that investors have been turning to equities for income, signs that payouts are becoming less reliable "could exacerbate the carnage already seen this year in financial markets".

Advertisement - Article continues below

The current figures are far worse than they were in 2008, when only 295 companies lowered their dividends, despite a major banking crisis and the implosion of Lehman Brothers. However, the full impact of the crisis wasn't reflected until 2009, when 527 companies cut dividends as corporate America scrambled to preserve cash.




The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019

There are lots of reasons to be bearish – but you should stick with the bulls

There are plenty of reasons to be gloomy about the stockmarkets. But the trend remains up, says Dominic Frisby. And you don’t want to bet against the …
17 Jul 2019

Good news on jobs scares US stockmarkets

June brought the best monthly US jobs growth of the year, but stockmarkets were not best pleased.
11 Jul 2019

Trade-war ceasefire boosts stockmarkets

Stockmarkets sighed with relief after the G20 summit in Japan brought a handshake between Donald Trump and Xi Jinping.
4 Jul 2019

Most Popular

Global Economy

The MoneyWeek Podcast: James Ferguson on the virus, the lockdown, and what comes next

Merryn talks to MoneyWeek regular James Ferguson of Macrostrategy Partnership about what's happened so far with the virus; whether the lockdown was th…
28 May 2020
UK Economy

What bounce back loans can tell us about how we’ll pay for all this

The government will guarantee emergency "bounce back loans" for small businesses hit by Covid-19. Inevitably, many businesses will default. And there'…
1 Jun 2020

As full lockdown ends, what are the risks for investors?

In the UK and elsewhere, people are gradually being let off the leash as the lockdown begins to end. John Stepek looks at what risks remain for invest…
29 May 2020