15 Big Companies that Stopped Paying Dividends
In this article, we discuss 15 big companies that stopped paying dividends. You can skip our detailed discussion on dividend stocks and their performance in the past, and go directly to read 5 Big Companies that Stopped Paying Dividends.
The pandemic in 2020 had a major impact on dividend payments. Global dividends went down significantly, and between the second and fourth quarters of 2020, the total amount of dividend cuts and cancellations reached $220 billion, as reported by Janus Henderson. Many US companies are still struggling because of the losses suffered during the pandemic and haven't been able to bring back their dividend payments. This kind of declines in dividend payouts was also witnessed during the Great Financial Crisis of 2008 when dividend cuts resulted in a total loss of $40.6 billion in dividend income.
Though dividend payments fell during the pandemic era, the financial positions of the companies became stronger after a few months following the pandemic as they took advantage of extremely low-interest rates and disposable income of consumers. Additionally, higher prices, increased consumer spending on products, and government assistance programs also contributed to their improved financial status. Hartford Funds also published a report on the corporate balance sheets and highlighted that companies started making money after the financial crisis as cash on their balance sheets increased by over three times since the early 2000s. The report also mentioned that the average dividend payout ratio of the S&P 500 companies in the past 96 years came in at 56.3%, but by the end of December 31, 2022, the payout ratio was only 37.1%, which means there's a lot of space for growth.
As the balance sheets have gotten better, dividend payments have also increased, surpassing their pre-pandemic levels. According to a report published by Wall Street Journal in June 2023, the total amount of dividends paid out in the last four quarters was $838 billion, compared with $628 billion before the pandemic.
Dividend stocks are facing challenges this year as tech stocks regain their importance. Dividend payments slowed in the second quarter of 2023 due to concerns about a possible recession, earnings, and higher government and corporate debt costs. S&P Dow Jones Indices reported that the total net changes in dividends for U.S. common stocks rose by $4.3 billion in Q2 2023, which is lower than the $9.7 billion in Q1 2023 and $17.6 billion in Q2 2022. However, Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, gave a constructive outlook on dividend stocks and mentioned that despite a decline, dividends will remain stable for the rest of the year. He said:
“The S&P 500 Q2 2023 actual payment declined 2.3% from the prior quarter, as the index ended its seven consecutive quarters of record payments. Financial dividends are expected to be limited due to the recent banking events and the expected new regulatory requirements, as well as Energy payouts, which remain volatile due to the underlying oil supply and demand issues. At this point, Q3 and Q4 payments are expected to increase with the potential of Q4 setting a new record, but it will be close.”
In this article, we will discuss companies that stopped paying dividends in the face of the recent pandemic or other economic conditions.
Source:unsplash
Our Methodology:
For this list, we searched for companies that have stopped paying dividends due to the pandemic, financial challenges, or cash flow management. The term 'big' in the title indicates that some of these companies were significant in the past but have gradually declined over time, leading to a decrease in their market values. The stocks are ranked in ascending order of their market caps.
15. Rite Aid Corporation (NYSE:RAD)
Market Cap as of August 14: $130.9 million
Rite Aid Corporation (NYSE:RAD) is a Pennsylvania-based drugstore chain that operates a network of pharmacies and stores that provide a range of pharmaceutical services, health and wellness products, and other goods. It is one of the companies that stopped paying dividends.
Rite Aid Corporation (NYSE:RAD) initiated its dividend policy and 1987 and paid regular dividends to shareholders for a few years due to the company's growth and success in its business operations during that period. However, the company suspended its dividends in 1999 because of the decline in its share price. RAD fell from $950 per share in January 1999 to $2.12 per share in August 2023, reflecting a total loss of 947% during this period.
As of the close of Q1 2023, 14 hedge funds in Insider Monkey's database owned stakes in Rite Aid Corporation (NYSE:RAD), worth collectively over $10.6 million. Ken Griffin's Citadel Investment Group was the company's largest stakeholder in Q1.
14. Eastman Kodak Company (NYSE:KODK)
Market Cap as of August 14: $400.6 million
Eastman Kodak Company (NYSE:KODK) is an American company that specializes in products related to the photography and imaging industry. While the company had historically been centered around film and photography-related products, it had also been diversifying into other areas such as digital imaging, printing, and commercial printing solutions.
Eastman Kodak Company (NYSE:KODK) paid regular dividends to shareholders up until the year 2009. It stopped paying dividends as a result of declining sales due to a shift from print-based photography to digital photography. In 2012, it filed for bankruptcy. However, the company is still operating in a reduced capacity after emerging from bankruptcy.
At the end of Q1 2023, 13 hedge funds tracked by Insider Monkey reported having stakes in Eastman Kodak Company (NYSE:KODK), up from 11 in the previous quarter. These stakes have a collective value of over $9.5 million.
13. Gannett Co., Inc. (NYSE:GCI)
Market Cap as of August 14: $511 million
Gannett Co., Inc. (NYSE:GCI) is a Virginia-based mass media holding company that specializes in publishing and digital content creation. In April 2020, the company announced the suspension of its dividends due to the decline in its advertising and events revenue. The company's management mentioned in a note that it will not reinstate dividends until conditions improve.
At the end of March 2023, 17 hedge funds owned stakes in Gannett Co., Inc. (NYSE:GCI), which remained unchanged from its previous dividend, according to Insider Monkey's database. These stakes have a total value of over $28.4 million. With over 7.8 million shares, Alta Fundamental Advisers was the company's leading stakeholder in Q1.
12. Brinker International, Inc. (NYSE:EAT)
Market Cap as of August 14: $1.6 billion
Brinker International, Inc. (NYSE:EAT) operates in the restaurant industry, primarily in the casual dining segment. The company paid its last dividend in the quarter that ended in March 2020 and has not reinstated its payouts as of now. It suspended its dividends mainly due to a sharp and rapid decline in sales.
At the end of March 2023, 24 hedge funds in Insider Monkey's database owned stakes in Brinker International, Inc. (NYSE:EAT), up from 23 in the previous quarter. These stakes are worth over $268.6 million collectively. Among these hedge funds, Graham Capital Management was the company's leading stakeholder in Q1.
11. Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY)
Market Cap as of August 14: $1.74 billion
Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) is a Texas-based company that operates a chain of entertainment and dining venues. These venues typically feature a combination of arcade games, sports viewing areas, and various forms of entertainment under one roof.
Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) is one of the companies that stopped paying dividends and also suspended its share buybacks in 2020. The company took this decision to save money because its arcade-themed restaurants were closed due to the pandemic.
According to Insider Monkey's database of Q1 2023, 33 hedge funds owned stakes in Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY), up from 32 in the previous quarter. The overall value of these stakes is over $523 million.
10. Abercrombie & Fitch Co. (NYSE:ANF)
Market Cap as of August 14: $1.9 billion
Abercrombie & Fitch Co. (NYSE:ANF) is a retail company that operates as a global specialty retailer of clothing, accessories, and personal care products. The company is known for its focus on casual, trendy, and youth-oriented fashion.
Abercrombie & Fitch Co. (NYSE:ANF) started paying dividends in 2004 and paid uninterrupted dividends until the pandemic. The company ceased its dividends in May 2020 and has not reinstated them as of now.
The number of hedge funds tracked by Insider Monkey owning stakes in Abercrombie & Fitch Co. (NYSE:ANF) stood at 23 in Q1 2023, up from 22 in the previous quarter. The consolidated value of these stakes is roughly $295.6 million.
9. The Goodyear Tire & Rubber Company (NASDAQ:GT)
Market Cap as of August 14: $3.6 billion
The Goodyear Tire & Rubber Company (NASDAQ:GT) is an American manufacturing company that specializes in manufacturing and selling tires for various types of vehicles. In addition to tires, the company also provides a wide range of related products and services.
As the car factories shut down due to the pandemic in 2020, The Goodyear Tire & Rubber Company (NASDAQ:GT) experienced significant declines in its tire shipments. Given this, the company announced suspending its dividends in April 2021 and expected to save over $37 million a quarter through these payments.
The number of hedge funds tracked by Insider Monkey owning stakes in The Goodyear Tire & Rubber Company (NASDAQ:GT) grew to 27 in Q1 2023, from 25 in the previous quarter. These stakes are collectively worth over $96.7 million.
8. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Market Cap as of August 14: $4.5 billion
AMC Entertainment Holdings, Inc. (NYSE:AMC) is primarily involved in the business of operating movie theatres and providing entertainment experiences. It is one of the companies that stopped paying dividends in the face of the pandemic in February 2020. However, the company paid a special dividend for the preferred equity unit in August 2022.
AMC Entertainment Holdings, Inc. (NYSE:AMC) was a part of 16 hedge fund portfolios at the end of Q1 2023, compared with 23 in the previous quarter. The stakes owned by these elite funds hold a collective value of over $47.6 million.
7. American Airlines Group Inc. (NASDAQ:AAL)
Market Cap as of August 14: $10.2 billion
American Airlines Group Inc. (NASDAQ:AAL) is a Texas-based company that operates as a major airline and has a large fleet of aircraft, offering both domestic and international flights. It is one of the major companies that stopped paying dividends.
After American Airlines Group Inc. (NASDAQ:AAL) posted a wider-than-expected Q1 2020 loss of $2.24 billion, the company announced to suspend its dividends and share buyback plans. The company has not restored its dividends as of the first quarter of 2023.
At the end of Q1 2023, 36 hedge funds tracked by Insider Monkey reported having stakes in American Airlines Group Inc. (NASDAQ:AAL), growing from 31 in the previous quarter. These stakes are worth collectively over $900.2 million. With roughly 4.5 million shares, Weiss Asset Management was the company's leading stakeholder in Q1.
6. Expedia Group, Inc. (NASDAQ:EXPE)
Market Cap as of August 14: $16.5 billion
Expedia Group, Inc. (NASDAQ:EXPE) is next on our list of companies that stopped paying dividends. The American company operates in the online travel and hospitality industry. It primarily functions as a travel booking platform, offering a wide range of services related to travel planning, reservations, and accommodations.
In April 2020, Expedia Group, Inc. (NASDAQ:EXPE) took the step to suspend its dividend payments in response to the travel bans and disruptions caused by the COVID-19 pandemic. This decision was made to increase the company's liquidity and conserve resources during a period of reduced travel and uncertainty in the travel industry.
Expedia Group, Inc. (NASDAQ:EXPE) was a part of 62 hedge fund portfolios at the end of Q1 2023, as per Insider Monkey's database. The stakes owned by these elite funds have a consolidated value of over $2 billion.
Aristotle Atlantic Partners, LLC mentioned Expedia Group, Inc. (NASDAQ:EXPE) in its Q1 2023 investor letter. Here is what the firm has to say:
“Expedia Group, Inc. (NASDAQ:EXPE) provides online travel services for leisure and small business travelers. The company offers a wide range of travel shopping and reservation services, as well as provides real-time access to schedule, pricing and availability information for airlines, hotels and car rental companies. Expedia serves customers worldwide.
We see Expedia benefiting from the growth of booking travel online, both for leisure and in corporate travel. The company also benefits from rapid growth in alternative accommodations, vacation home rental, through VRBO. The main sources of revenue and profitability are from hotel and vacation home rental. Additionally Expedia has exposure to airline ticket sales and automobile rentals. Post the COVID-19 pandemic, Expedia’s debt has been reduced and share repurchase has resumed and we would expect a dividend to be reinstated.”
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Disclosure. None. 15 Big Companies that Stopped Paying Dividends is originally published on Insider Monkey.
