The Dividend Cuts Are Coming, The Dividend Cuts Are Coming!

It was interested to read in The Wall Street Journal that the rate of dividend increases was starting to slow. There's a host of issues to think about for your income portfolio based on this, from how you select stocks to your expectations from the stocks you own. But there was one thing from the article that didn't sit well with me: dividend cuts weren't seen as a big issue. I did a little more digging and it turns out dividend cuts are a bigger problem than The Journal suggested.
The slow downTo quickly summarize, according to The Journal, the amount by which companies have increased their dividends has tumbled about 50% since 2013 based on dividend increases so far this year. That said, dividend cuts and outright suspensions are running at about the same pace this year as they were last year. So, slower dividend growth, but no material uptick in the number of cuts. Sound like the big issue is the slowdown in dividend growth over the last few years.
But something didn't feel right to me, so, over the weekend, I started to look into dividend cuts. Unfortunately, dividend cuts in line with the cuts seen in early 2015 would put this year on pace to match the highest level of dividend cuts since 2009 and more than were seen in 2008. I don't care what The Journal says, that's sounds like bad news to me.
Similar but differentIf you don't recall, there was a deep financial-led recession between 2007 and 2009. That period was particularly hard for... Read more