Six companies bucking the dividend cuts trend
Filed under: Company News
Capital One (COF) today joined the growing list of major corporations drastically cutting their dividends. In fact, since the start of 2009, $40.8 billion less in dividend income will flow to investors thanks to dividend cuts by 41 corporations so far. Dividend cuts in the first quarter of 2009 total more than in all of 2008, when dividend income cuts by 61 companies meant shareholder income dropped $40.6 billion.
"We expect decreases to continue as companies take the prudent steps to preserve cash that assist in their ability to ride out the recession," Howard Silverblatt, senior analyst at S&P, told the Los Angeles Times. He expects more cuts are coming.
But, with careful shopping you can find good income generators with dividend paying companies. The key is to find companies that are in a strong enough cash position to be able to ride out the economic storm.
Some companies still paying dividends and which continue to increase their dividend include:
- Chevron (CVX), whose annual dividend is $2.60 per share, 6% yield.
- Essex Property Trust (ESS), whose annual dividend is $4.09 per share, 7.5% yield.
- Exxon Mobil (XOM), whose annual dividend is $1.60 per share, 2.4% yield.
- General Dynamics (GD), whose annual dividend is $1.40 per share, 3.2% yield.
- Piedmont Natural Gas (PNY), whose annual dividend is $1.04, 4.3% yield.
- WGL Holdings (WGL), whose annual dividend is $1.42, 4.7% yield.
If you need income from your stocks, you can still find some strong candidates out there, but be sure you look not only at the dividend yield but also at a company's cash position. If you see a yield that seems too good to be true, it probably is. Once the company faces reality that it can't keep paying that level of dividends and make it through the current economic storm, the dividends will be cut.
Lita Epstein has written more than 25 books, including Trading for Dummies and Reading Financial Reports for Dummies.
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Reader Comments (Page 1 of 1)
3-10-2009 @ 3:00PM
T. J. Dillon said...
I am 92 and I do not need any bailout money.
If a bank cannot make a legimate profit for itself and stockholdersby paying 4% per annum on passbook savings, and 6% for a 30 year mortgage they are no better than Shylock. Those that fail have not followed the Golden Rule of good Business.
They now have the advantage of overnight loans to other banks and make more money than doing car loans.
The banks would have you believe that it is right to "nickle and dime fee you" as a need and a right.
I have never know an honest banker who was poor or a failure . Those who fail are indeed corrupted by greed and have lost the trust of their customers.
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3-10-2009 @ 3:01PM
Norma said...
Why is my company, AT&T, never mentioned in these dividend articles? Although the stock is down, as others are, the dividends remain steady. It would be nice to report this in an article and maybe persuade others to buy. Price is 22.83 today, up 1.11. Also, with new government contracts coming to extend broadband, we may be looking at some lucrative contracts.
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3-10-2009 @ 3:01PM
Patty Weidl said...
I have just about decided GM should go bankrupt. Someone stole my molding at the door and passenger window. I just got an estimate. Would you believe $200.00 for that little part? Even the body shop guy was shocked.
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3-10-2009 @ 4:44PM
ANNE said...
ON THIS LIST THEY DID NOT INCLUDE........ AIG--BELIEVE IT OR NOT THEY STILL PAY DIVIDENDS =WHICH AMOUNTS TO MORE THAN THE ACTUAL COST OF THE STOCK RIGHT NOW--SO ITS NOT WORTH EVEN SELLING BECAUSE THE DIVIDENDS PAY MORE THAN SELLING!!
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3-10-2009 @ 4:45PM
E.C. Strange said...
I bought a Gen. Motors Diesel powered truck ( 0ne Ton ) for my farm in 1995. It stayed in the shop more than the farm. It has less than 70,000 miles now. It would not start and when it did, would not run but a minute or two. Had it towed home for the eighth time and parked it. I hope they go broke.
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3-10-2009 @ 4:45PM
SANDY said...
I like PGH the dividend is 12%! Most of the oil trusts have very high dividends
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3-10-2009 @ 4:45PM
foxylynx said...
how come they did not mention Altria (MO) which is over 8% a year and is rock solid.
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3-10-2009 @ 5:35PM
Eric said...
Johnson & Johnson also has a long record of regular dividends and annual dividend increases.
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