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
Popular Posts
-
My retirement strategy is based on living off dividends . A successful retirement strategy is dependent on the asset returns you hold in you...
-
The last two weeks have been a little turbulent. Those tariff news really seem to have spooked markets worldwide. Luckily, we are Dividend ...
-
The stock market has been turbulent the past month or so. As a dividend growth investor, I usually ignore the ups and downs of the market. ...
-
Last week, there were nine companies that raised dividends in the US. Only two of those companies have managed to raise dividends for at lea...
-
“In bear markets, stocks return to their rightful owners.” - J.P. Morgan I love this quote. It summarizes a ton of insights into a simple,...
-
The Procter & Gamble Company (PG) provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Groomin...
-
I was reviewing my old files and re-visited an interesting paper from Standard & Poor's from a few years ago about the importance of...
-
I review the list of dividend increases as part of my monitoring process. There were 15 companies that increased dividends last week. Ten of...
-
I review the list of dividend increases every week as part of my monitoring process. Dividend increases provide signaling value to me in my ...
-
The past few months have been difficult for many investors. Stocks are down from their all time highs, reached just a few months ago. It is ...