2020 Dividends Hit Record

In early 2020, stories in the news were of companies lowering or eliminating dividend payments. However, these stories appear to be overblown concerning dividends. During the year, dividend payments reached a record of $503.1 billion. The economic slowdown did dramatically affect stock repurchases as buybacks in 2020 were only about $300 billion compared to the 3-year average of $700 billion. In the textbook, we discussed how repurchases allow a company more options than dividends when making payments stockholders and corporate payout actions in 2020 appear to support this argument.