FactSet Insight: The Great Dividend Divide: Spotting Clues from Two Telling Companies’ Payout Changes

Read the full article on FactSet Insight.


With the bulk of Q1 earnings season in the rearview mirror, investors have a better sense of where things stand at the macro and company-specific levels. It turns out that firms produced decent per-share profits last quarter despite the dismal economic outlook. 

Now with the Fed likely being done with its rate-hike cycle, and lower borrowing costs on the horizon, executives can make capital allocation decisions with a bit more confidence. Still, a recession looms. Current consensus calls for two-quarters of contraction in U.S. real GDP during the back half of 2023. That uneasiness might outweigh the boon that is market interest rates which appear to be stabilizing.

Cha-Cha- (Dividend) Changes

This week, we’ll explore dividend trends seen in Q1 along with highlighting a pair of domestic large caps that have changed their payout policies in light of diverging macro trends. Spotting these micro clues helps traders and money managers get clarity on the bigger picture.

With a coverage universe spanning more than 10,000 companies worldwide, Wall Street Horizon finds that 2023 is off to a decent start from the viewpoint of the number of dividend increases compared to decreases. Illustrated below, the numbers are comparable to what was seen throughout the same period a year ago, but on the two-year stack and versus 2020, corporate optimism today appears much better—at least according to dividend trends. This is an arrow in the bulls’ quiver amid heightened recession chatter.