Oct
2020
Dividendmax: Covid 19 and Dividends
DIY Investor
1 October 2020
The impact of the pandemic on Dividends has been swift and dramatic. Firstly, it came at a very bad time in March / April which was just after the main ‘Finals’ reporting season – writes Mark Riding of Dividendmax.
In over nine years of running DividendMax, we believe we had only seen cancelled dividends maybe once or twice.
With the advent of lockdown, a virtually unprecedented event – we saw previously declared dividends cancelled and havoc in the markets.
Covid 19 statements were being made by hundreds of companies and many were cancelling dividends declared in the weeks before.
It is fair to say that there were a lot of companies with strong balance sheets or lesser impacted businesses that chose to plough on with their dividend payments.
The overall picture in the UK was relatively black and white. They either cut the dividend completely or paid up, with a much lesser number choosing to defer the dividends or reduce them due to Covid. The exact numbers for the FTSE 100 are detailed below.
As time passed we saw a good number of dividends being reinstated as companies realized that their businesses were not as badly affected as they first thought they would be.
Certain sectors were very badly affected. The banks were told not to pay dividends in calendar year 2020, the travel and leisure sectors were very quickly on their knees; Aerospace and Defence similarly so; pubs, bars and restaurants were closed. Retail was also savaged save for the food retailers. The oil industry suffered from the double whammy of Covid and a price war between Russia and Saudi Arabia.
Six months on, the worst affected sectors have continued with their interim results to not pay dividends.
See the table below for the full picture of what happened in the FTSE 100:
| Company | Cut | Cancelled previously declared | Increased | Decreased | Maintained | Resumed | Paid previously cancelled |
|---|---|---|---|---|---|---|---|
| 3i Group | yes | ||||||
| Admiral | yes | ||||||
| Anglo American | Yes | ||||||
| Antofagasta | Yes | ||||||
| Ashtead | yes | ||||||
| Associated British food | yes | ||||||
| Astra Zeneca | yes | ||||||
| Auto trader | yes | ||||||
| Avast | yes | ||||||
| Aveva | yes | ||||||
| Aviva | yes | yes | |||||
| BAE | yes | yes | yes | ||||
| Barclays | yes | ||||||
| Barratt dev | yes | yes | |||||
| Berkeley | yes | ||||||
| BHP | yes | ||||||
| BP | yes | ||||||
| BATS | yes | ||||||
| British Land | yes | yes | |||||
| BT | yes | ||||||
| Bunzl | yes | yes | yes | ||||
| Burberry | yes | ||||||
| Coca cola HBC | yes | ||||||
| Compass | Yes | ||||||
| CRH | yes | ||||||
| Croda | yes | ||||||
| DCC | yes | ||||||
| Diageo | yes | ||||||
| Evraz | yes | ||||||
| Experian | yes | ||||||
| Ferguson | yes | ||||||
| Flutter | yes | ||||||
| Fresnillo | yes | ||||||
| Glaxo | yes | ||||||
| Glencore | yes | ||||||
| GVC | yes | yes | |||||
| Halma | yes | ||||||
| Hargreaves Lansdown | yes | ||||||
| Hikma | yes | ||||||
| Homeserve | yes | ||||||
| HSBC | yes | ||||||
| Imperial | yes | ||||||
| Informa | yes | yes | |||||
| Intercontinental hotels | yes | yes | |||||
| Intermediate Capital | yes | ||||||
| Intertek | yes | ||||||
| ITV | yes | yes | |||||
| JD Sports | yes | ||||||
| Johnson Matthey | yes | ||||||
| Just Eat | NA | NA | NA | NA | NA | NA | NA |
| Kingfisher | yes | ||||||
| Land Securities | yes | yes | |||||
| Legal & General | yes | ||||||
| Lloyds bank | yes | ||||||
| LSE | yes | ||||||
| Melrose | yes | yes | |||||
| M&G | yes | ||||||
| Mondi | yes | yes | |||||
| Morrisons | yes | ||||||
| National Grid | yes | ||||||
| Nat West | Yes | ||||||
| Next | yes | ||||||
| Ocado | NA | NA | NA | NA | NA | NA | NA |
| Pearson | yes | ||||||
| Pennon | yes | ||||||
| Persimmon | yes | yes | yes | ||||
| Phoenix | yes | ||||||
| Polymetal | yes | ||||||
| Prudential | yes | ||||||
| Reckitt | yes | ||||||
| RELX | yes | ||||||
| Rentokil | yes | yes | |||||
| Rightmove | yes | yes | |||||
| Rio Tinto | yes | ||||||
| Rolls Royce | yes | yes | |||||
| Royal Dutch A | yes | ||||||
| Royal Dutch B | yes | ||||||
| RSA insurance | yes | yes | |||||
| Sage | yes | ||||||
| Severn Trent | yes | ||||||
| Smith (DS) | yes | yes | |||||
| Smith & Nephew | yes | ||||||
| Sainsbury | yes | ||||||
| Schroders | yes | ||||||
| Scottish Mortgage IT | yes | ||||||
| Segro | yes | ||||||
| Smiths Group | yes | ||||||
| Smurfit Kappa | yes | yes | |||||
| Spirax Sarco | yes | ||||||
| SSE | yes | ||||||
| Standard Chartered | yes | ||||||
| Standard lie Aberdeen | yes | ||||||
| St James place | yes | ||||||
| Taylor Wimpey | yes | ||||||
| Tesco | yes | ||||||
| Unilever | yes | ||||||
| United Utilities | yes | ||||||
| Vodafone | yes | ||||||
| Whitbread | yes | ||||||
| WPP | yes |
Of the 98 companies in the FTSE 100 that paid dividends:
- 32 cut their dividends
- 21 cancelled a previously declared dividend.
- 32 Increased their dividend
- 15 maintained their dividend
- 14 decreased their dividend
- 3 resumed their dividend
- 3 paid a previously cancelled dividend.
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