Darren415
2023 has come to an finish, abandoning a combined legacy.
For dividend-paying shares, December 2023 was consultant of 2023 as an entire. There was excellent news in that the variety of unfavorable modifications have been down, month-over-month, quarter-over-quarter, and year-over-year. However there was additionally dangerous and combined information. The variety of dividend will increase was additionally down month-over-month and year-over-year, representing a unfavorable growth for traders. Nevertheless, that scenario was mitigated by the variety of dividend will increase rising quarter-over-quarter in 2023-This fall.
Let’s get straight to the numbers. The next desk presents Customary & Poor’s dividend metadata for December 2023. It summarizes how the month’s dividend knowledge compares in each Month-over-Month (MoM) and 12 months-Over-12 months (YoY) phrases with beforehand reported knowledge:
| Dividend Adjustments in December 2023 | |||||
|---|---|---|---|---|---|
| Dec-2023 | Nov-2023 | MoM | Dec-2022 | YoY | |
| Complete Declarations | 5,405 | 3,822 | 1,583 ▲ | 5,528 | -123 ▼ |
| Favorable | 239 | 264 | -25 ▼ | 281 | -42 ▼ |
| – Will increase | 121 | 161 | -40 ▼ | 144 | -23 ▼ |
| – Particular/Additional | 118 | 103 | 15 ▲ | 135 | -17 ▼ |
| – Resumed | 0 | 0 | 0   |
2 | -2 ▼ |
| Unfavorable | 8 | 15 | -7 ▼ | 31 | -23 ▼ |
| – Decreases | 8 | 15 | -7 ▼ | 31 | -23 ▼ |
| – Omitted/Handed | 0 | 0 | 0 |
0 | 0 |
Now, let’s visualize that knowledge, beginning with the variety of dividend rises and reduces reported every month over the past 20 years to place these numbers into their long-term context.
The subsequent chart focuses on simply the final 5 quarters, spanning from 2022-This fall by means of 2023-This fall. This presentation makes it simpler to see the downward tendencies within the year-over-year figures for dividend will increase, and in addition the enhancing pattern for dividend decreases.
Our sampling of December 2023’s unfavorable dividend actions discovered 14 companies asserting decreases in dividend funds to their shareholding house owners. Six companies asserting dividend decreases in December 2023 signify the actual property trade, the biggest share of any industrial sector, which is smart provided that sector has been hammered all through 2023 by rising rates of interest within the U.S. The oil and gasoline trade contributed the second-highest share of any industrial sector for the month. Nevertheless, at 5 companies, the variety of dividend decreases for this sector falls nicely inside the background noise vary we count on for the oil and gasoline trade given that the majority of those companies pay variable dividends which might be immediately affected by how the worth of oil has modified in current months.
The remaining three companies within the sampling hail from the manufacturing, packaging (client cyclical), and banking industries.
We have tallied up the variety of dividend cuts by industrial sector from our month-to-month sampling over the fourth quarter of 2023 within the subsequent chart:
Dividend reductions in the actual property sector outnumbered these within the oil and gasoline trade. That is exceptional as a result of most of the companies that noticed decreased dividend funds to shareholders within the oil and gasoline trade pay variable dividends on a month-to-month foundation. Nonetheless, the focus of dividend decreases in the actual property sector factors to the outsize impact of the Federal Reserve’s sequence of rate of interest hikes from March 2022 by means of July 2023 in negatively impacting the sector, which we should always word additionally negatively affected the banking trade.
2024 promises to see the Federal Reserve swing into reverse and lower rates of interest as an alternative, which bodes higher for banks and the actual property trade. That anticipated change has the potential to enhance the outlook for companies in these sectors and return them to the ranks of companies rising their dividends.
References
Customary & Poor. S&P Market Attributes Internet File. [Excel Spreadsheet]. Accessed 1 January 2024.
Editor’s Word: The abstract bullets for this text have been chosen by Searching for Alpha editors.