The below chart is shows the aggregate 3-month rolling summation of dividend cuts for companies in the S&P 1500. The importance here is that the a high level of dividend cuts, with high defined as 50 or more cuts in any 3-month period, coincidences with periods of recessionary or slow growth in the economy.
I think this works because companies will usually only cut dividends when business conditions are slowing considerably. Furthermore, dividend cuts occur also usually only occur when companies see the slowdown persisting. This is why tracking dividend cuts is so important, as it is a window into the current and future economic outlook of management teams.
Currently, the rolling 3-month summation of dividend cuts is 68, above the 50 company threshold. This is another indicator in a mosaic that suggests that the economy is not as strong, and the outlook is not as robust as some say it is.
I think this works because companies will usually only cut dividends when business conditions are slowing considerably. Furthermore, dividend cuts occur also usually only occur when companies see the slowdown persisting. This is why tracking dividend cuts is so important, as it is a window into the current and future economic outlook of management teams.
Currently, the rolling 3-month summation of dividend cuts is 68, above the 50 company threshold. This is another indicator in a mosaic that suggests that the economy is not as strong, and the outlook is not as robust as some say it is.
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