Is Exxon dividend at risk?

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Freeport-McMoran cutting its dividend to 5 cents a share from 31 cents a share in response to the impact of lower commodity prices may be understandable, but it is a fairly rare event. Companies do not like to cut their dividends.

Freeport is only the third company in the S&P 500 to cut its dividend this year after Ensco and Diamond Offshore.

If you go back 10 years, you can see how rare dividend cuts are: there have been only 240 cuts, versus 3,683 dividend increases. Of those cuts almost half (110) were in financials, most after 2008.

Many of those dividend cuts from Financials have since been restored, or substantially restored.

Which brings me to my next point: the big dividend payers. The big three, by dollar value of dividends paid, are:

Biggest dividend payers (S&P 500)

ExxonMobil: $11.6 billion

Apple: $11.0 billion

Microsoft: $10.2 billion

Source: S&P

ExxonMobil is going to be the focus of a lot of attention in the next few days. That's because Exxon has raised its dividend in April every year since 2007. Exxon, in fact, has raised its dividend every year for 32 years, but since 2007 it has done so in April.

So with worries about dividend cuts in energy, Exxon will be in the spotlight. They currently pay 69 cents a quarter (a healthy 3.2 percent yield); the Street is certainly expecting them to maintain the dividend, and perhaps increase it modestly. It's likely they will cut capital spending even more before they cut the dividend.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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