U.S. companies' dividend growth slows in Q1 on weak consumer spending and economic slowdown

The increases in dividends on U.S. domestic common stocks exceeded dividend cuts by $9.7B in Q1 2022, S&P Dow Jones Indices said Thursday.

Indicated dividend net changes (increases minus decreases) for U.S. common stocks in the quarter fell from a $14.6B increase in Q4 2022 and down from $18.2B in Q1 2022.

Q1 U.S. common dividend increases were $19.7B, up 21.0% from $16.3 billion in Q4 2022 and down 28.8% from $27.7 billion in Q1 2022. Dividend decreases were $10.0 billion, up 485% from $1.7 billion in Q4 2021, and up 5.6% from $9.5 billion in Q1 2022.

For the 12-month period ended March 2023, the net dividend rate increased $59.7B vs. net $70.1B in the 12-month period ended March 2022.

"Dividend payments continued at record levels and are expected to continue to do so for 2023. However, the size of the increases have declined and are expected to remain modest for the year as concerns over decreased consumer spending and an economic slowdown have increased," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "For 2023, the dollar aggregate of dividends are expected to increase, but at half the pace of the double-digit 2022 growth."

Within the S&P 500, Q1 2023 cash dividends set a record payment, and were up 0.9% over the record Q4 2022 payment and up 7.9% over Q1 2022.

993 dividend increases were reported during Q1 2023 compared to 963 during Q1 2022, a 3.1% year-over-year increase. 218 issues decreased dividends in Q1 2023, a 207% year-over-year increase compared to 71 during Q1 2022.