Coronavirus Stimulus impact on Dividends

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
Topic Author
paul e
Posts: 172
Joined: Sat Feb 02, 2008 5:44 pm

Coronavirus Stimulus impact on Dividends

Post by paul e » Wed Mar 25, 2020 12:14 pm

Now that the stimulus package has been approved in the senate, certain details have emerged, one of which is that stock buybacks will be disallowed by companies receiving stimulus money as will the payment of dividends..

My question which is highly impactful to many retirees is how will VTSAX dividends be affected by this?

User avatar
Cheez-It Guy
Posts: 715
Joined: Sun Mar 03, 2019 4:20 pm

Re: Coronavirus Stimulus impact on Dividends

Post by Cheez-It Guy » Wed Mar 25, 2020 12:20 pm

Is there a time-based restriction on dividend non-payment, or can they never pay a dividend ever again?

User avatar
Scott S
Posts: 1453
Joined: Mon Nov 24, 2008 3:28 am
Location: CID

Re: Coronavirus Stimulus impact on Dividends

Post by Scott S » Wed Mar 25, 2020 12:28 pm

There was already mounting pressure on certain large companies to halt buybacks/dividends if they wanted to receive bailout funds. A couple have already announced that they are suspending these activities to preserve cash. Between that and reduced earnings from lots of other companies, I'm expecting to see a lot smaller dividend payments over the next few periods.

Despite this pressure, I don't expect dividends/buybacks to be halted forever. Some new restrictions *might* come out of this, but I'm not expecting anything major.

BTW, this should probably have gone in one of the larger "coronavirus" threads -- the mods don't want the forum swamped with a whole bunch of them. ;)
My Plan: (Age-10)% in bonds until I reach age 60, 50/50 thereafter. Equity split: 50/50 US/Int'l, Bond split: 50/50 TBM/TIPS.

Mako
Posts: 247
Joined: Wed Feb 28, 2007 9:34 am

Re: Coronavirus Stimulus impact on Dividends

Post by Mako » Wed Mar 25, 2020 1:06 pm

I read, at least in one iteration of this bill, that the restriction would be for one year after receiving any funds. Not sure about the final language.

Scott S wrote:
Wed Mar 25, 2020 12:28 pm
BTW, this should probably have gone in one of the larger "coronavirus" threads -- the mods don't want the forum swamped with a whole bunch of them. ;)
I'm not a mod, but I don't agree. I think those more general threads have their own value, but discussion of the specific laws should be separate or they will just get lost in the giant threads.

This law isn't quite law yet though, so this will probably be locked for now.

User avatar
Misenplace
Moderator
Posts: 1761
Joined: Mon Feb 01, 2016 9:46 pm

Re: Coronavirus Stimulus impact on Dividends

Post by Misenplace » Wed Mar 25, 2020 2:10 pm

^That's right.

As noted in Re: Tax exempt muni bond funds & proposed lower rates on taxable investment interest, discussions about proposed or pending legislation (what will happen to implement the changes) is off-topic to "keep investors from making bad decisions. Pending legislation and proposed regulations change many times between the time they're introduced and signed into law."

The stimulus package is no exception. Based on past experience, discussions without clear direction will soon devolve into contentious disagreements.


This thread is off-topic (pending legislation) and is locked.

User avatar
LadyGeek
Site Admin
Posts: 61060
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Coronavirus Stimulus impact on Dividends

Post by LadyGeek » Fri Mar 27, 2020 4:22 pm

The bill has been signed into law. This thread is reopened to continue the discussion.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Post Reply