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Dividend Massacre In This Crisis Is Already Breaking Records, But It Just Started

Published Thu, 30 Apr 2020 12:30:25 -0400 on Seeking Alpha

Mortgage REITs have reduced or eliminated their rich dividends.
135 companies have announced in 2020 through Monday morning that they would reduce their dividends.
All dividend actions so far this year through Monday amount to a cut in payouts of about $22.8 billion, according to S&P Dow Jones Indices, cited by the Wall Street Journal.
Dividend yield can be an irresistible siren song in the era of central bank interest rate and bond yield repression: Harley-Davidson's (NYSE: HOG) dividend yield was over 7% until this morning - when it announced that it would slash its dividend by 95%, from 38 cents to a symbolic 2 cents to conserve cash. Going forward, the dividend yield will be close to 0%.
GM (NYSE: GM), whose dividend yield was an alluring 6.5%, announced yesterday that it would eliminate its dividend altogether to save about $2 billion in cash; and going forward, its dividend yield will be 0%. Ford (NYSE: F) had a dividend yield of over 11% before it eliminated its dividend.
Mortgage REITs have reduced or eliminated their rich dividends - and dividends are the primary reason to hold REITs. This started in late March, when AG Mortgage Investment Trust (NYSE: MITT) announced that it would stop paying dividends. Invesco Mortgage Capital (NYSE: IVR) and TPG RE Finance Trust (NYSE: TRTX) both said they would "delay" paying their previously announced dividends to preserve liquidity. In April, AGNC (Nasdaq: AGNC) announced that it would reduce its dividend by 25%.
All of them had theoretical dividend yields well into the double digits. Invesco's theoretical dividend yield - which reflects the past annual dividend payments as a percent of current share price - is over 60%.
Mall REITs are under enormous pressure, with most of their tenants shut down and many of them not paying rent. For example, Macerich (NYSE: MAC) announced mid-March that it would reduce its dividend from 75 cents a share to 50 cents, of which it would pay only 20% in cash and the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
AMERICAN CAPITAL AGENCY 15.64   0.0 -1.54 1.92 12.21
INVESCO MORTGAGE CAPITAL 15.18   0.0 -1.01 1.80 11.80
AG MORTGAGE INVESTMENT TRUST 17.47   6.1 2.87 1.90 10.89
MACERICH 33.33   43.9 0.76 3.00 8.91
MACY'S 17.00   5.2 3.29 1.51 8.83
FORD MOTOR 9.41   17.1 0.55 0.60 6.37
KOHL'S 52.36   11.5 4.54 2.68 5.24
LAS VEGAS SANDS 60.15   24.1 2.50 3.08 5.22
EXXON MOBIL 71.98   17.3 4.15 3.48 4.83
HARLEY-DAVIDSON 36.05   13.3 2.71 1.50 4.24
CHEVRON 121.42   15.7 7.72 4.76 3.91
GENERAL MOTORS 39.07   6.2 6.29 1.52 3.84
BOEING 375.63   44.0 8.54 8.22 2.22
TJX 56.75   22.9 2.48 0.92 1.62
MARRIOTT INTERNATIONAL 132.51   32.5 4.08 1.92 1.46
ESTEE LAUDER 197.22   40.8 4.83 1.72 0.86

AMERICAN CAPITAL AGENCY - AGNC
AMERICAN CAPITAL AGENCY - AGNC  


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