This chart might be one of the scariest you will see this week. It gives a bleak picture of what is going on inside corporate America.
The number of companies increasing dividends per share has dropped by the most since right before the Great Recession.
Andrew Birstingl, Research Analyst for FactSet.com writes…
But while DPS for the index has continued to rise, it has been doing so at a decreasing rate. Q1 was the second consecutive quarter that DPS has increased at a single-digit growth rate. This marked a divergence from the post-recession trend, in which dividends per share for the S&P 500 grew at double-digit growth rates.
Over the next 12 months, dividend per share growth for the S&P 500 is expected to slow to 4.9%. This growth deceleration has been a consistent trend over the past year for the index. Analysts are projecting that seven out of the ten sectors will see slower DPS growth over the next 12 months.
The economic slowdown in the first half of 2016 has hit corporate America hard. Most companies can not afford to increase their dividends as they have done the last seven years. Falling dividends make a lot of sense because earnings have been falling for more than a year.