Ex dividend

30 March 2020 By Peter Thal Larsen Follow @Peter_TL

Companies like Ford, H&M and UniCredit have cancelled payouts. Government curbs and the need to conserve cash mean more will follow. Distributions had more than doubled since the last crisis-induced drop. Pension funds and other income investors will feel the lack of cash flow.

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Goldman Sachs analysts on March 30 predicted that dividends paid by companies in the S&P 500 Index would fall by 25% in 2020 as certain large dividend-paying industries fall victim to the economic shock of the coronavirus outbreak.

“The record high level of net leverage for the median S&P 500 stock coupled with the ongoing credit market stress means many firms are unlikely to borrow to fund their dividend,” the analysts wrote.

The European Central Bank on March 27 asked banks not to pay dividends until at least October 2020, boosting lenders’ capacity to absorb losses and support new lending.

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