Readers sometimes ask why I recommend stocks that recently cut their dividends. It’s a reasonable concern. Strong companies, by and large, boost their payouts, so slashing the distribution probably signals that something is wrong. Dividend cutters, however, often represent remarkable bargains. After companies slash their payouts, investors all tend to dump their shares at the same time. During these occasions, you can sometimes pick up good, albeit slightly damaged, assets for pennies on the dollar.
Case in point: Dynagas LNG Partners LP (NYSE:DLNG). This limited partnership owns dozens of ocean vessels that ship liquefied natural gas around the world. And while the company’s dividend history has a few blemishes, units could represent a real bargain for income investors. In April, Dynagas cuts its distribution by 41%. Simply put, management fell into the trap many businesses fall into: they committed to a large payout supported by unsustainably high profits during the “good times.”
Source: Income Investors
Related Articles:
- What's Your Retirement Vision?
- The Most Important Financial Statement When Selecting Dividend Growth Stocks
- Stock Dividends, The Gift of Nothing
- What's More Powerful Than Compound Interest?
- Dividends vs. Stock Buybacks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
It’s no secret that most investors who buy high-yield stocks are looking for income. But every once in a while, yield hunters may come acros...
-
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 ...
-
Dividend-paying securities are the major sources of consistent income when returns from the equity market are at risk. Why Growth-Focused Di...
-
Not all stocks that pay high dividends are too good to be true. In fact, some stocks with high yields have lots of room to grow, or they tra...
-
After an abysmal 2018, real estate investment trusts (REITs) have been on a roll this year. After pulling one of the worst performances sinc...
-
There are some dividend aristocrats which have not only maintained but increased their dividends for over half a century. Having survived ev...
-
Cheap stocks can be hard to find in a high-flying market like the current one. The S&P 500 is flirting with all-time highs following its...
-
Large-cap consumer staples companies are not known for making big moves in their share prices. But on the morning of Monday, April 22, Kimbe...
-
Big, boring AT&T (NYSE:T) recently made a splash, selling its minority stake in streaming video site Hulu. AT&T stock gained 0.7% on...
-
Finding great dividend stocks isn't always about searching out the highest dividend yield. Often, especially for retirees seeking a mixt...
0 comments
Post a Comment
Post a Comment