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America’s largest public companies were expected to pay out more than half a trillion dollars to shareholders in 2020, but then the coronavirus pandemic hit. Now, there are 43 fewer companies in the S&P 500 paying a dividend to shareholders, compared with the 423 firms at the beginning of the year.
What does this mean for the futures of these companies? In some cases, layoffs and furloughs. But, according to MagnifyMoney’s analysis of data for the 500 publicly traded companies that comprise the S&P 500, 57% of the firms that announced layoffs or furloughs through June 24 have maintained or raised their shareholder dividends.
Among companies that chose to opt for layoffs or furloughs in 2020, many maintained their current dividend, though a substantial number either reduced or suspended their dividends.
|Dividend breakdown for companies with announced layoffs or furloughs|
|Increased Dividend||Maintained Dividend||Reduced or Suspended Dividend||No Dividend|
|Baxter International||Advanced Auto Parts||Boeing||Carmax|
|IBM||Archer-Daniels-Midland||Darden Restaurants||Dish Network|
|AT&T||Delta Air Lines||LKQ|
|Baker Hughes||Estée Lauder||Mohawk Industries|
|Best Buy||Freeport-McMoRan||TransDigm Group|
|C. H. Robinson Worldwide||Gap||Ulta Beauty|
|Caterpillar||General Motors||Under Armour|
|Chevron||Halliburton||United Airlines Holdings|
|Cintas||Hilton Worldwide Holdings|
|Emerson Electric||MGM Resorts|
|General Electric||Old Dominion Freight Line|
|Hewlett Packard||Ralph Lauren|
|Honeywell International||Raytheon Technologies|
|Leggett & Platt||The Walt Disney Co.|
|Royal Caribbean Cruises|
|Stanley Black & Decker|
Layoffs or furloughs between March 11, 2020, and June 24, 2020
In a typical year, S&P companies pay out between 30% to 40% of their earnings to shareholders in the form of a dividend. For the S&P 500, that amounted to $485 billion in 2019. But with S&P 500 earnings estimated to decline 23% in 2020, some firms are dialing back expectations, affecting the dividends they’re willing to distribute to shareholders.
Here’s a breakdown of each dividend category among companies that announced layoffs or furloughs from the time the coronavirus crisis began in March to June 24.
Only two companies with announced layoffs or furloughs increased dividends once the pandemic began:
|Company||Annualized dividend (March 11)||Annualized dividend (Aug. 5)|
|Baxter International||$0.88 per share||$0.98 per share|
|IBM||$6.48 per share||$6.52 per share|
Thirty-six companies laid off or furloughed employees while maintaining their dividends. Here are job highlights from some of these companies:
Twenty-one companies that announced layoffs or furloughs also reduced or suspended dividends once the coronavirus pandemic began. Here are some highlights among the companies:
Eight companies with no dividend payouts announced layoffs or furloughs, according to MagnifyMoney’s data. Notably, Chicago-based United Airlines said it could lay off 36,000 workers (nearly 40% of its 95,000 employees) in the fall if there isn’t a travel rebound. Richmond, Va.-based used-auto retailer CarMax, meanwhile, furloughed about 15,500 employees in April.
A Dividend Aristocrat is a company that has paid out higher yearly dividends for 25 consecutive years.
Sixty-five companies have increased their dividend annually for at least a quarter of a century, according to the latest count as of July 31, 2020. These Dividend Aristocrats are attractive to certain investors, such as retirees looking for a stream of income, because of that positive, proven track record.
However, 14 of these companies have announced job cuts or furloughs since the pandemic began:
Layoffs or furloughs have been announced at these firms that have at least a 25-year history of increasing dividends annually. Only one — Raytheon Technologies — reduced dividends.
|Company||Sector||Annual Dividend per Share|
|Genuine Parts||Consumer discretionary||$3.16|
|Leggett & Platt||Consumer discretionary||$1.60|
|Hormel Foods||Consumer staples||$0.93|
|Stanley Black & Decker**||Industrials||$2.76|
* Reduced dividend from $2.94 per share
One company further stands out: Waltham, Mass.-based Raytheon Technologies. The aerospace company cut dividends while furloughing employees. The furloughs were announced in early May, alongside plans to cut $2 billion in costs.
MagnifyMoney examined the recent dividend-paying history of the 500 firms comprising the S&P 500. We then compared their increases, decreases and maintenance of dividend payouts to announcements of job layoffs or furloughs between March 11, 2020, and June 24, 2020. Layoff and furlough announcements were sourced from JUST Capital’s COVID-19 Corporate Response Tracker, Drafted’s layoff list and other news items. Dividend history, as of Aug. 5, 2020, is based on data from Nasdaq.
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