If you are a dividends investor in this market, you can say goodbye to your monthly or quarterly checks.
Across North America and Europe, businesses are suspending their dividends payments to tighten their belts and ensure sufficient funding to see through the financial crisis.
While no official numbers have been released, Bloomberg estimates that about $56 billion in dividend payments have been scrapped. And you can anticipate more to come, especially among the banks.
Several central banks, including the Reserve Bank of New Zealand (RBNZ) and the European Central Bank (ECB), have ordered banks to stop paying out dividends to shareholders.
The two companies with the largest dividend cancellations so far have been HSBC and Boeing.
From the business news network:
The bulk of the cancellations, $53 billion (49 billion Euros), came from Western Europe where more than half the total comes from its beleaguered banking sector. HSBC Holdings Plc, the largest cancellation, raised the ire of core investors who called for legal action against the halted payouts. The bank will withhold more than $4 billion of cash that was previously earmarked for investors.
Boeing Co., the Chicago-based planemaker, was the biggest cut by total dollar value in the U.S. It suspended its dividend on March 20 after the outbreak disrupted travel and upended the company’s finances as it was spending heavily to keep its suppliers afloat ahead of the expected midyear return of the 737 Max.
When the dividend schedule restarts is anyone’s guess.
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