Small-Cap Dividend Risks and Cuts, The Quality Difference
A Quality dividend investing approach may help reduce the risk of dividend cuts or suspensions. OUSM’s definition of dividend quality includes measures for dividend growth and coverage.
Negative dividend actions (July 2020):
- 10% of stocks in OUSM announced suspending their dividend vs. 13% for the dividend paying stocks in the Russell 2000.
- Only 3% of stocks announced decreasing their dividend vs. 7% for the dividend paying stocks in the Russell 2000.
Positive dividend actions (July 2020):
- 72% of stocks in OUSM announced maintaining their dividend vs. 66% for the dividend paying stocks in the Russell 2000.
- 14% of stocks in OUSM announced increasing their dividend vs. 11% for the dividend paying stocks in the Russell 2000.
% OF TOTAL | DECREASE | INCREASE | INITIATE | REINITIATE | MAINTAIN | SUSPEND | UNKNOWN | TOTAL |
---|---|---|---|---|---|---|---|---|
OUSM | 3.0% | 13.6% | 0.0% | 0.0% | 71.7% | 9.6% | 2.0% | 100% |
Russell 2000 DIVIDEND PAYERS | 6.8% | 10.6% | 0.7% | 0.2% | 66.2% | 12.7% | 2.9% | 100% |
OUSM vs. Russell 2000 Dividend Payers
DECREASE | SUSPEND | INCREASE | INITIATE | REINITIATE | MAINTAIN | UNKNOWN | TOTAL | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
OUSM | Russell 2000 | OUSM | Russell 2000 | OUSM | Russell 2000 | OUSM | Russell 2000 | OUSM | Russell 2000 | OUSM | Russell 2000 | OUSM | Russell 2000 | OUSM | Russell 2000 | |
Communication Services | 0 | 3 | 1 | 9 | 2 | 2 | 0 | 0 | 0 | 1 | 2 | 6 | 0 | 0 | 5 | 21 |
Consumer Discretionary | 3 | 5 | 11 | 38 | 1 | 7 | 0 | 0 | 0 | 0 | 15 | 34 | 1 | 2 | 31 | 86 |
Consumer Staples | 0 | 2 | 0 | 1 | 3 | 6 | 0 | 0 | 0 | 0 | 3 | 18 | 0 | 0 | 6 | 27 |
Energy | 0 | 6 | 0 | 10 | 3 | 3 | 0 | 0 | 0 | 0 | 0 | 7 | 0 | 6 | 3 | 32 |
Financials | 1 | 25 | 0 | 3 | 8 | 30 | 0 | 4 | 0 | 1 | 49 | 276 | 1 | 7 | 59 | 346 |
Health Care | 0 | 0 | 1 | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 7 | 14 | 0 | 0 | 8 | 17 |
Industrials | 1 | 6 | 3 | 17 | 5 | 11 | 0 | 0 | 0 | 0 | 33 | 91 | 2 | 3 | 44 | 128 |
Information Tech | 1 | 1 | 3 | 5 | 0 | 7 | 0 | 0 | 0 | 0 | 16 | 24 | 0 | 2 | 20 | 39 |
Materials | 0 | 0 | 0 | 6 | 0 | 4 | 0 | 1 | 0 | 0 | 0 | 33 | 0 | 3 | 0 | 47 |
Real Estate | 0 | 11 | 0 | 19 | 0 | 12 | 0 | 0 | 0 | 0 | 0 | 53 | 0 | 1 | 0 | 96 |
Utilities | 0 | 0 | 0 | 0 | 5 | 10 | 0 | 1 | 0 | 0 | 17 | 21 | 0 | 1 | 22 | 33 |
Total | 6 | 59 | 19 | 111 | 27 | 92 | 0 | 6 | 0 | 2 | 142 | 577 | 4 | 25 | 198 | 872 |
Source: Bloomberg Finance L.P. Data retrieved 7/31/2020. Dividend Paying stocks in Russell 2000: 872, OUSM Number of Stocks: 194. Past performance does not guarantee future results. Investors cannot directly invest in an index.