Dividends4Life: Cyclical Dividend Stocks

Cyclical Dividend Stocks

Posted by D4L | Monday, July 16, 2012 | | 0 comments »

Cyclical dividend stocks are like the snacks and soft drink aisle in the grocery store. Sure you might toss the odd item into your cart, but you know there’s healthier eating elsewhere. Companies in sectors like energy, materials and industrials are subject to the ups and downs of the economy, and that adds an element of risk to their dividends.

Whereas a utility or telecom company can usually be relied on to maintain or grow dividends, an oil producer or heavy equipment dealer might have to reduce or even eliminate cash payouts in tough times. We’ve seen some tough times in the global economy lately, and there could be more to come. But when growth returns, cyclical dividend stocks will offer a little more nutrition than usual in comparison to the traditional dividend stocks. Let’s be clear about something upfront – cyclical stocks can be solid long-term dividend growers.

Source: The Globe and Mail

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