As the doomsayers continue to predict, well, gloom, we keep clipping the little columns in the WSJ called “Dividend Changes.” We found these little gems that appear Tuesday – Friday every week about three or four years ago.
For a while, we clipped each column, and even occasionally bought stock in a good-looking company that was listed at the top of the entries: “Increased.” The next section is called “Reduced,” others are named Initial, Irregular, Funds and Investments companies, Foreigh, Special and on rare occasions, something liked Eliminated. The first item can be a buy sign. In our opinion, the others are sell signals, or who cares?
There’s a tremendous amount of information in this little column. The percentage yield, the index symbol, the actual amounts of the old dividend and the new one, the payable date, and the record date. The record date is the day you have to own the stock (or earlier) in order to get paid the dividend on the payable date.
In all that time, through the big market crash, the big recession, the comeback, the fallback and the comeback again, of the market indexes, we have seen far more dividend increases than any other items, except funds and investment companies. Unlike regular companies, which declare a dividend then pay it until the board changes the policy by increasing, reducing, or eliminating it, it looks as if funds declare dividends each quarter or month.
The big reducers were, of course, the banks. That was pitiful. There are others, but there is no pattern or industry that we have noticed, that is showing such distress as the financial institutions. For the Bailed Out Big Five, of course, the federal government forced them to lower or eliminate their dividends. Some of the other, smaller banks were also forced, but far less publicly by their regulator, to do the same.
All this is to say that U.S. companies, for the most part, stayed stable, maintained their employees’ salaries and benefits, their board members’ remuneration, their bondholders’ interest payments and their shareholders’ dividends. A remarkable record – one to be proud of.