What Happens to Dividends During Recessions and Bear Markets?

Many retirement-aged investors lean on dividends to make ends meet. The idea is to receive a stream of passive, predictable, and growing income that is independent of fickle stock prices. Instead of worrying about where the market might head any given year or which investments to sell to generate income using the 4% rule, many dividend investors bank on the resiliency of their income rolling in and hope to leave their nest egg largely untouched. But is this really a wise strategy during recessions? After all, if dividends are paid out of cash flow, which shrinks for most companies during economic downturns, significant dividend cuts seem like they should be expected as well. In this article, we will examine historical evidence [...]

September 20th, 2018|

20 Best Recession Proof Dividend Stocks

Preserving capital and generating safe income are core goals in retirement. So not surprisingly, conservative investors often worry about when the next recession will occur and how it will affect their portfolios. Safe dividend-paying stocks can be an appealing choice for retirees who desire a predictable income stream that can hold its ground regardless of economic conditions and short-term stock price fluctuations. In fact, over 240 dividend-paying stocks in our database maintained or increased their dividends each year during the financial crisis while also outperforming the S&P 500's 55% peak-to-trough plunge by more than 20%. In other words, there were some excellent recession proof investments a risk averse income investor could have owned prior to the last downturn. But what [...]

September 19th, 2018|

Philip Morris International Faces Growth Headwinds: Is the Dividend Still Safe?

Since being spun off from Altria (MO) in 2008 Philip Morris International (PM) has raised its dividend every year and delivered predictable returns thanks to the steady nature of the tobacco business. However, this year Philip Morris shares are down nearly 25% on growing concerns over whether its strategy for adapting to the continued global decline in smoking can succeed. Let's take a closer look at why the market is so bearish on this tobacco giant and whether or not Philip Morris investors need to worry about the safety and long-term growth prospects of its generous dividend. Philip Morris is Betting Big on Reduced-Risk Products But Has Hit Some Growth Challenges About 93% of Philip Morris' revenue still comes from [...]

September 7th, 2018|

Is Altria Still a Dependable High-Yield Dividend Growth Stock?

Over the past half century tobacco giant Altria (MO) has not only been a dependable source of safe and fast growing dividends, but it's also been one of the best performing stocks in the market. However, in 2018 MO's stock has slumped 15%, pushing its dividend yield to its highest level since 2014. As traditional cigarettes continue their secular decline and more alternative products enter the market, some investors are worried about Altria's long-term outlook and the safety of its dividend.

September 7th, 2018|
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