It’s been more than a year since the financial market crisis began. Over those twelve horrendous months financial stocks have been the worst sector to be invested in. Record losses, coupled with more expectations of write-offs coupled with dividend cuts that made headlines surprised many investors who logically went straight for the exits.
On Friday FNM reported more than 2.3 billion in losses for 2Q 2008. At the same time the struggling housing lender cut their dividends, following the dividend cuts of Freddie Mac. Based off these news some gurus will tell you that dividend investing was a fad to begin with and that the best stocks to own are AAPL and RIMM.
That’s very far from the truth. Out of the 60 dividend aristocrats, which are companies that have increased their dividend payments to shareholders for more than 25 consecutive years, more than 40 have announced changes in their annual dividend rates. And guess what; only three out of 40 have actually cut their dividends – KEY, FITB and RF. Two other companies, GCI and BAC have so far frozen their dividend payments.
You could view the announced changes in annual dividends so far this year, courtesy of Standard & Poors.
Based off the above mentioned list, I would say that dividend investors haven’t been affected that badly by the financial turmoil that’s been capturing the markets in recent months as the dividend income has increased by over 7% in over year if an investor held a single share in each of the above mentioned dividend aristocrats.
What’s better than having the ability to buy more shares at depressed prices while you get an increasing stream of dividend income? You get to reinvest your dividends at deflated prices and you could also dollar cost average by taking full advantage of the fear on Wall Street,
Full Disclosure: The author is long US stocks.
Relevant Articles:
- Selected Dividend Increases in July
- My Dividend Growth Plan - Diversification
- I got a 10% raise from CSL (Carlisle Companies)
- Realty Income (O) Dividend Analisys
Subscribe to:
Post Comments (Atom)
Popular Posts
-
I have often been asked to name my best idea by people who have not heard much about me apparently. Regular readers know that I am a very b...
-
As a dividend growth investor, I have owned shares in major tobacco companies such as Altria (MO) , Phillip Morris International (PM) and B...
-
I am a buy and hold dividend growth investor. This means that I build my portfolio patiently. It also means that I rarely sell. I buy stocks...
-
As part of my monitoring process, I review the list of dividend increases every week. This exercise helps me monitor the progress of existi...
-
I review the list of dividend increases every week, as part of my portfolio monitoring process. I leverage several of my dividend investing ...
-
My monitoring process involves reviewing notable information for companies on my watchlist and companies on my portfolio. A fairly significa...
-
Terry Smith is a British fund manager, who has an impressive track record over the past decade at the fund he founded, Fundsmith. Some call ...
-
In my previous article, I discussed in brief how I come up with investment ideas . I also wanted to share with you my general philosophy on ...
-
There were 62 dividend increases last week. Last week was the busiest week for dividend increases since February 2020 . This was right befor...
-
As an investor, I follow a very simple model. I look for companies that have a track record of annual dividend increases, supported by earn...
No comments:
Post a Comment
Questions or comments? You can reach out to me at my website address name at gmail dot com.