Earnings cover the dividend sufficiently and those earnings are from diversified underlying sources so there's only a tiny
probability of a dividend cut.
Not only are your dividend payments reduced, but also stock values fall well
ahead of the dividend cut, and often fall even further immediately following the announcement.
It will (barring a
rash of dividend cuts, which is highly unlikely) generate enough cash over the next year to cover roughly one - third of our living expenses.
While the
announcement of a dividend cut could have a negative impact on shares, investors may want to consider that market headwinds are already priced into shares.
My ETF heavy portfolio always sees a lot
of dividend cuts in the first quarter of the new year, so March's dividends cuts are disappointing, but not surprising.
Fears of a Dividend Cut Dropped Mosaic Company Stock 16.1 % in September @themotleyfool #stocks $ POT, $ MOS, $ AGU
A recent study showed that from 1965 - 2001 35 %
of dividend cuts led to operating improvements, increased profitability and the resumption of dividends within 5 years.
Indeed, Dow Theory Forecasts put stocks yielding at least 8 % in its theoretic portfolio, raising the
odds of a dividend cut, Hulbert adds.
Four Pillars: I agree that many forget to take into account the dividends when looking at crashes, but there have been record
levels of dividend cuts recently.
And
speaking of dividend cuts, this month's newest cut (jeez, it has become so common that I mention it every month now...) is by DHY, which gave its dividend a slight trim from 2.3 cents per share to 2.2 cents (a modest 4.3 % cut).
FIFTH, if you are a dividend investor and one of your holdings cuts their dividend (or you even hear serious
talk of a dividend cut), take a hard look at selling the stock at that point.
According to Morgan Stanley research, healthcare REITs account for 19 %
of all dividend cuts by property type since 1995.
It's important to pay attention to a stocks Dividend Safety Score which can help to evaluate the chance
of a dividend cut well before it happens, often issuing warning signs many years in advance.
Currency issues continue to hamper the company but with a low payout ratio, Aflac is set up to weather times like this without
risks of dividend cuts or freezes.
For example, a dividend paying stock's yield could be high simply because its share price has dropped sharply (because you use a company's share price to calculate yield) in
anticipation of a dividend cut.
P / E10 (actually, 100E10 / P) does better than the initial dividend yield
because of dividend cuts, especially before the 1950s.
That assumption seems logical because the income shares are lower in the capital structure, are perpetual, and bear the risk
of dividend cuts.
Everything else being equal, these companies carry less risk
of dividend cuts.
I'm afraid the long term risk
of a dividend cut is higher than most investors perceive.
However, I avoid higher yielding stocks to avoid the risk
of a dividend cut.
Look at
all of the dividend cuts over the past two years.
This allows you to build wealth over time, as long as you pick companies with a minimal risk
of a dividend cut.
People forget
all of the dividend cuts in the»70s.
By comparison, the multifamily sector was responsible for 22 %
of all dividend cuts, with retail REITs rounding out the high - end of the list at 23 %.