There has been a lot of concern about the security of financial stocks' dividends lately. And I can see why ...
According to the latest data from S&P, 16 companies have cut their dividends so far this year vs. 12 for the FIVE-YEAR period from 2003 through 2007. Even more telling is that fact that five of the 12 cuts over that period came in the fouth-quarter of 2007, as the credit crunch started happening.
Am I concerned about more cuts in the future? Of course. And there's never any way to know with certainty that even the companies that are able to continue paying will choose to do so.
Still, based on comments from executives and balance sheet strength, I continue to believe that the very strongest companies in the space have the desire and means to maintain their payments.
Posted by: Aaron on Monday, June 23, 2008
The rich keep getting richer (energy stocks) and the poor poorer (financials), but someday it will turnaround. http://www.growyourfunds.com/2008/06/the_rich_get_richer_and_the_po.html
Posted by: Joseph Malanio on Tuesday, June 24, 2008
I'm a real RWR customer and Larry's Option Alert. As far as dividends are concerned, Larry has made some great recommendations. As I focus more on a steady income recently, I'm looking for investments that will produce 9 -10% returns or better (less any growth of the stock). What's your take on that?
Posted by: Nilus Mattive on Thursday, June 26, 2008
Hey, Joseph. Yes, Larry has definitely made some good calls on high-yielding oil and gas shares. Glad to hear you benefited! In terms of high-yielding shares in other sectors and industries, I'm currently recommending some companies with yields in the kind of range you're looking for (and beyond!). They run the gamut from pharma to telecom. I'll be the first person to say that high-yielding stocks carry an above-average level of risk, and are not for the faint of heart. But the companies I profile in my Dividend Superstars newsletter are the ones I consider to be the best available in the markets today. Some have been making outsized payments for many years!