Most stocks that pay meaningful yields today do so because their stock prices are cheap. Their dividends are being paid from earnings that aren’t there. Big oil is a big dividend trap. A low payout ratio — the percentage of earnings a company pays out to investors — is generally a good thing. Until that number turns negative, that is.
BP plc (BP) lost $2.49 per share over the last 12 months while stubbornly paying out $2.40 in dividends – for a big yet unsustainable current yield of 7.8%. How’d it fill the gap? Almost $5 billion in additional long-term debt. Meanwhile Chevron (CVX) and Exxon Mobil (XOM) — paying 5% and 3.9% respectively — are, to their credit, making money. I haven’t recommended a utility to my subscribers in nearly two years because the valuations became too rich. The Utilities SPDR (XLU) vpays just 3.7% today. As discussed, government bonds aren’t going to pay you much today. The 10-year pays 2.2%, and the 30-year just 3%. The SPDR Barclays High Yield Bond ETF (JNK) shed 12% over the last 6 months.
Source: InvestorPlace
Related Articles:
- Building Yield: 7 Consumer Goods Dividend Stocks
- 9 Higher-Yielding Financial Services Stocks With Rising Dividends
- Dividend Stocks vs. a Safe Distribution Rate
- 12 Under-Valued Dividend Stocks
- Successful Investors Take The Emotion Out
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Showing resilience during a tough week was a group of stocks that has not been heard from much in the past two years. A group that has been ...
-
Anxiety over the European debt crisis and distrust in the markets drove volatility in global stock markets to dizzying heights in 2011. The ...
-
In bull markets, dividends become more or less irrelevant. When the Dow Jones Industrial Average traded above 14,000 in 2007, very few stoc...
-
Whether you are looking to supplement your income or looking to build wealth over very long periods of time, dividend stocks that can reliab...
-
There have been a lot of business cycles over the past five decades, ups and downs through which it takes astute leadership to survive and t...
-
This BDC remains a "Strong Buy". It has a diversified investment portfolio with considerable NII-upside. Shares sell for a premium...
-
A safe yield and solid growth prospects are a must for any investor in real estate investment trusts -- and this company not only has these ...
-
The S&P 500 might be on one of its strongest bull runs ever, but there are several solid dividend stocks out there that haven't quit...
-
Dividend payers have long had a reputation as stodgy companies that can pay a reliable income but whose stocks don't move too fast. Here...
-
These stocks need to achieve the right balance between dividend payment and the re-investment of profits. This ensures that the dividend is ...
0 comments
Post a Comment
Post a Comment