ANALYSIS: S&P 500 Buyback Suspensions, Dividend Cuts Raise Flags

Corporations in the hardest-hit sector of the economy are taking a combination of cash-conserving actions as consumer discretionary spending declines to concerningly low levels. These actions may signal approaching distress for more companies. They are also among the measures taken by the “zombie companies” of the pandemic that are being propped up by bonds and government assistance.

Year to date, S&P 500 consumer, cyclical companies have announced the highest number of buyback suspensions and dividend cuts compared to all other sectors.

Twenty-eight S&P 500 companies in the consumer, cyclical industry have announced buyback suspensions and 21 have ...