April has been a rough money for dividends.
With the U.S. economy crumbling under the weight of the virus and decimated oil prices, companies are moving to preserve cash by cutting dividends. “Dividend pain has just begun,” analyst Charles Toole of Adviser Investments said, as quoted by CNBC.
General Motors (GM) for example just cut its quarterly cash dividend and its share buyback program. All as the virus does severe damage to global auto sales. “We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic,” said GM Chief Financial Officer Dhivya Suryadevara, as quoted by Reuters.
There are rumblings that Exxon Mobil (XOM) may be forced to cuts its dividend, too.
Ford Motor (F) cut its dividend, which could save the company about $2.4 billion annually, notes The Wall Street Journal. Carnival (CCL) cut its dividend and cut capital expenditures and operating expenses, as noted by Barron’s.
Estee Lauder (EL) cut executive salaries, suspended dividends, issued notes and borrowedd the full amount under its $1.5 billion revolving credit facility, as the cosmetics giant reacts to the coronavirus pandemic, says The Street.
Hilton Worldwide (HLT) suspended its dividends and buybacks, too. Hilton explained that “[w]ith travel at a virtual standstill, operations have been suspended across many managed and franchised hotels, and those hotels that remain open have reduced services for guests because of decreased occupancy levels.”
Unfortunately, this may only be the start of a long list of recent cuts.
Arch Coal just cut its 50-cent dividend. Expedia halted its 34-cent dividend. Quest Diagnostics just suspended its buyback program. Las Vegas Sands cut its dividend of 79 cents. ConocoPhillips suspended its buyback program. Columbia Sportswear cut its 10-cent dividend.
Those are only a few. We could even see Exxon Mobil cut its dividends, too.