Published Sun, 19 Apr 2020 08:00:00 -0400 on Seeking Alpha
When the tide goes out, dividend-paying companies should be better dressed. How is that holding up in 2020?
We check in with dividend-focused authors on how they value this market, and what they are watching for from their portfolio holdings.
We also get into the big downside question - is it worse for a company to cut its dividend or increase its leverage?
The coronavirus outbreak and the effects of COVID-19 have gone deeper and wider than most people would have expected. That applies just as much to markets as anywhere. Whether it's a tech sector that is supporting our new work from home or re-rating as expensive EV/Sales multiples make less sense; a healthcare industry under the spotlight to find a vaccine, a cure, or provide treatment to patients; or various parts of the financial sector that have shown acute strain as the economy goes into the freezer for a few weeks, and what increasingly looks like a few months or more of containment - there are no real safe havens or quiet zones.
Dividend investing comes in many strains, but in some ways, it seems designed for a time like this - all things equal, higher quality and more profitable companies pay dividends, and the emotional reassurance of cashing dividend checks during a volatile period is worth its weight in gold (or share equivalents). At the same time, a dividend cut and a company that gets exposed as less than it seemed to be can be all the more devastating.
We asked a panel of income and dividend-focused authors how they are sizing up the market and balancing the search for safety with the search for returns. Our panel includes:
Richard Berger, author of Engineered Income Investing Double Dividend Stocks, author Hidden Dividend Stock Plus Fredrik Arnold, author of The Dividend Dog Catcher Darren McCammon, author of Cash Flow Kingdom Kirk Spano, author of Margin of Safety Investing Tariq Dennison, author of Long Run Income Limelight Alpha Management Partners, author of Top Stocks For Tomorrow... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|MV OIL TRUST||7.55||5.5||1.38||1.22||15.76|
|SABINE ROYALTY TRUST||46.22||13.4||3.44||2.90||5.98|
|ROYAL BANK OF CANADA||78.79||11.9||6.61||3.16||4.00|
|ISHARES DOW JONES SELECT DIVIDEND INDEX FUND||103.22||0.0||0.00||3.37||3.31|
|JOHNSON & JOHNSON||130.43||21.6||6.03||3.80||2.93|
|VANGUARD HIGH DIVIDEND YIELD ETF||89.75||0.0||0.00||0.00||2.79|
|PROCTER & GAMBLE||122.77||90.3||1.36||2.98||2.49|
|SPDR S&P 500 ETF||301.29||0.0||0.00||5.42||1.82|
|VANGUARD DIVIDEND APPRECIATION ETF||120.84||0.0||0.00||0.00||1.58|
|POWERSHARES QQQ TRUST SERIES 1||193.23||0.0||0.00||1.49||0.78|
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