A significant subset of Wall Street investors view a dividend as a critical component of stock ownership, so management is very reluctant to cut. But with 30% to 50% declines in some stocks in the past two months, even with the rally, previously modest dividend yields of 2% to 3% are now in the 4%, 5% or 6% range for many companies and they are unsustainable given much lower cash flows.
Some investors seem to feel the drop in dividends will be substantial. The Chicago Mercantile Exchange has maintained a S&P 500 Annual Dividend Index Futures contract for the past five years. Right now, investors are anticipating dividends will decline by 16% for full-year 2020 dividends. "Investors who rely on dividends for income are about to feel the pain of the coronavirus pandemic's knock-on effects," Toole wrote.
Finding companies at risk is fairly easy. Look for those that pay respectable dividends and have seen cash flow drop dramatically. "Regulation aside, companies most at risk of needing to cut their dividend are those whose cash generation is currently too low to sustain a dividend payment," Michael Lerner at Credit Suisse wrote in a recent note to clients. Companies on his list include
●●●●4\\15
Poor Millionaires, not going to get their dividend... :( Poor babies....
Nothing a little bootstraps and gumption can't fix.
Thats why you buy $TSLA
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