The dollar value of dividends from big American firms rose from $342bn in 2013 to $535bn in 2019, growing three times faster than those in Europe did
world of business, the dividends that firms pay to their shareholders are often considered a bloodless topic. Compared with share prices, they rarely set pulses racing. Corporate-finance theory says that dividends are largely irrelevant to a company’s underlying value and its shareholders’ wealth—just as withdrawing cash from anmachine doesn’t make you richer. Accountants grumble that dividends can increase tax bills. Cynics shrug them off as hush money to shareholders.
The story they revealed as they dropped through shareholders’ letter boxes—or not—during the covid-19 pandemic only added to the cooped-up recipients’ woes. In Europe especially, a rash of dividend cuts showed how sick many of the region’s most blue-blooded firms were. Royal Dutch Shell and, two European oil majors, bowed to the inevitable toll of collapsing oil prices and took an axe to their dividends.
What about dividends in America? As in Europe, some so-called dividend aristocrats—ie, those who have increased the base dividend consecutively for years—were living beyond their means even before the pandemic struck, shovelling more money to shareholders than they made in profits. They include ExxonMobil as well as.
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