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Should Retirees Worry About Dividend Cuts From Dividend Aristocrats?

Published Tue, 11 Jul 2017 10:30:00 -0400 on Seeking Alpha

Many retirees and other investors that rely on income from their investments put a big portion of their wealth into dividend growth stocks, especially those characterized as the so called Dividend Aristocrats. Due to the fact that the current list only includes those stocks that did not cut their dividends in the last 25 years, it looks like dividend cuts do happen very rarely, if at all. When we look at what companies made up that list before the financial crisis, we see that dividend cuts, at least during harsh economic times, are more likely than many investors believe.
In 2007, before the financial crisis, a big list of companies had increased their annual payout for at least 25 years in a row: These Dividend Aristocrats totaled 59 different companies. A significant portion of these companies have cut their dividends since or has otherwise ceased to pay dividends -- let's look at the list for both the Dividend Aristocrats from 2007 as well as those that still hold this status today:
The full list from 2007 includes the following companies (courtesy of Eddy Elfenbein):
Abbott Labs (NYSE: ABT) Archer-Daniels-Midland (NYSE: ADM) Automatic Data Processing (Nasdaq: ADP) Avery Dennison (NYSE: AVY) Bank of America (NYSE: BAC) BB&T Corporation (NYSE: BBT) Bard (C.R. Bard) Inc. (NYSE: BCR) Becton, Dickinson (NYSE: BDX) Anheuser-Busch (NYSE: BUD) Chubb (NYSE: CB) Compass Bancshares Cincinnati Financial (Nasdaq: CINF) Clorox (NYSE: CLX) Comerica (NYSE: CMA) Century... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CENTURYLINK 13.53   0.0 -7.43 1.00 7.94
ALTRIA GROUP 44.46   13.2 3.36 3.36 7.23
GANNETT 10.82   98.4 0.11 0.64 5.89
COMERICA 64.76   8.3 7.79 2.68 4.18
KEYCORP 18.03   10.7 1.68 0.74 4.08
REGIONS FINANCIAL 16.25   10.1 1.61 0.62 3.87
PFIZER 37.28   17.0 2.19 1.44 3.85
LEGGETT PLATT 42.18   19.6 2.15 1.60 3.82
BB&T 52.79   13.1 4.04 1.80 3.51
ARCHER-DANIELS-MIDLAND 41.45   17.8 2.33 1.40 3.47
FIFTH THIRD BANCORP 28.03   9.5 2.94 0.96 3.44
FIRST HORIZON NATIONAL 16.46   9.2 1.79 0.56 3.42
3M 170.58   20.6 8.28 5.76 3.41
CONSOLIDATED EDISON 90.19   21.4 4.21 2.96 3.31
STATE STREET 60.27   10.9 5.51 1.88 3.20
SYNOVUS FINANCIAL 37.56   11.1 3.39 1.20 3.16
KIMBERLY-CLARK 133.58   25.8 5.18 4.12 3.14
NUCOR 53.69   7.6 7.09 1.60 3.04
EMERSON ELECTRIC 64.71   18.4 3.52 1.96 3.02
COCA-COLA 55.11   33.6 1.64 1.60 2.94
JOHNSON & JOHNSON 130.43   21.6 6.03 3.80 2.93
PEPSICO 137.29   15.2 9.02 3.82 2.81
CLOROX 160.20   25.3 6.34 4.24 2.68
U.S. BANCORP 55.73   13.1 4.25 1.48 2.65
M&T BANK 156.79   11.2 13.98 4.00 2.58
PROCTER & GAMBLE 122.77   90.3 1.36 2.98 2.49
BANK OF AMERICA 29.67   10.6 2.80 0.72 2.45
TARGET 108.94   18.0 6.04 2.64 2.43
JOHNSON CONTROLS 44.30   6.7 6.57 1.04 2.42
JOHNSON CONTROLS INTERNATIONAL 44.30   6.7 6.57 1.04 2.42
ELI LILLY 111.47   14.0 7.97 2.58 2.32
MCDONALDS 212.15   27.9 7.61 4.64 2.21
AVERY DENNISON 113.00   41.1 2.75 2.32 2.04
DOVER 99.67   24.4 4.08 1.96 2.02
CINCINNATI FINANCIAL 113.24   15.3 7.41 2.24 2.00
GRAINGER, W.W. 293.60   20.0 14.65 5.76 1.98
ADP 160.41   30.6 5.24 3.16 1.92
LOWES COMPANIES 113.88   35.6 3.20 2.20 1.91
VF CORP 90.35   31.6 2.86 1.72 1.91
CHUBB 160.10   19.6 8.15 3.00 1.88
STANLEY BLACK & DECKER 147.12   31.3 4.70 2.76 1.87
WAL-MART STORES 116.92   26.3 4.44 2.12 1.83
ANHEUSER-BUSCH INBEV 97.47   25.9 3.76 1.67 1.77
PPG INDUSTRIES 118.21   23.3 5.08 2.04 1.74
ABBOTT LABORATORIES 85.21   52.3 1.63 1.28 1.54
SLM 9.26   7.4 1.25 0.12 1.29
BECTON DICKINSON 262.15   92.0 2.85 3.08 1.18
SHERWIN-WILLIAMS 538.95   43.3 12.44 4.52 0.87
PROGRESSIVE 76.98   14.0 5.50 0.40 0.53
GENERAL ELECTRIC 9.26   0.0 -2.15 0.04 0.44
BARD, C.R. 333.19   43.9 7.59 1.04 0.31
SUPERVALU 32.49   98.4 0.33 0.00 0.00
 

CENTURYLINK - CTL
CENTURYLINK - CTL  


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