Amid the scarcity of yield during the coronavirus slowdown, investors should look to companies with secure dividends for stability, according to JPMorgan.
The Wall Street firm said the current macroeconomic backdrop from the COVID-19 shutdown and the low interest rate environment makes stable dividends worth the premium they sometimes trade. JPMorgan's sustainable dividends basket has outperformed the unsustainable dividends basket by 43% so far in 2020.
"We expect investors will remain partial to companies with Sustainable Dividends and should continue to hold these positions as core holdings, especially in a zero rate environment, expanding Central Bank balance sheets, and low earnings visibility," JPMorgan equity and quant strategist Dubravko Lakos-Bujas told clients.
Pro But companies could stop paying dividends because of uncertainty - I heard from a smart Investor & he said - stocks should not be purchased just for the sake of dividends
Pro If you put a dime in the stock market after the crap they've dealt us - you are a fool.