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
-
I review the list of dividends increases as part of my monitoring process. This exercise helps me monitor existing holdings and potentially ...
-
I have a simple process for evaluating companies. I focus on several key factors, which tell me whether a company is worth putting on my lis...
-
I review the list of dividend increases each week as part of my monitoring process. I use this process to review existing holdings and poten...
-
I review the list of dividend increases every week, as part of my monitoring process. Dividends have signaling power about management's ...
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor existing holdings, but...
-
Life is full of choices. A few examples include: Should I spend money on things today, or save money for the future? Ultimately, you need t...
-
As a shareholder, there are two ways to make profits from a stock. The first way is when you sell your stock for a gain, after it has incre...
-
In terms of a somewhat succint summary, it is good to think in terms of trade-offs in the full picture. The expected returns formula I use r...
-
I love the power of compound interest. I also love reading stories of ordinary folks, who invested for the long-run in blue chip, dividend ...
-
The S&P Dividend Aristocrats index tracks companies in the S&P 500 that have increased dividends every year for at least 25 years ...
