In the bull market following the Global Financial Crisis (GFC), companies dramatically increased capital distributions to shareholders. Much of that capital was returned through stock buybacks, but dividend payouts also played a major role. S&P 500 stocks paid out nearly $500 billion in dividends last year, making 2019 a record year for dividend payouts by some measures.
The current crisis has changed that landscape. News reports of dividend cuts and suspensions have emerged in recent weeks as companies seek to preserve cash, secure their balance sheets, and ensure stability. Growth in dividends has made a substantial contribution to stockmarket returns since the GFC; a significant reduction in dividend payouts over an extended period could have a very negative effect on equity-market performance.