Ben Lofthouse, the head of global equity income at Janus Henderson Investors, understands how difficult life can be in this years-long low-interest-rate environment. But he advises income-seeking investors to think carefully about companies that might look like solid dividend payers but whose industries are changing so dramatically that the stocks may be headed over a cliff.
The August edition of the Janus Henderson Global Dividend Index study makes for fascinating reading and can be downloaded here in full. You might not expect such a high-level review of corporate dividend payment trends to apply to you, but it is informative, not only about opportunities in dividend stocks in a world that is starving for yield, but for investors who want to avoid getting burned.
Think ahead. Do you believe a company you are considering for investment is likely to remain competitive in providing goods and services for the next decade or two? The auto industry is certainly in a transitional phase — probably a very long one. Equities for income The S&P 500 SPX, +0.06% had a weighted aggregate dividend yield of 2.03% as of the market close on Aug. 26, according to FactSet. That was well above the 1.46% yield on 10-year U.S. Treasury notes TMUBMUSD10Y, +0.00%, and it even exceeded the 1.96% yield on 30-year U.S. Treasury bonds TMUBMUSD30Y, +0.00%.
Looking to the U.S., Lofthouse said “things that have worked” have included Crown Castle CCI, -0.53%, a real estate investment trust that owns cell towers and related fiber networks, and data-center REITs, such as CyrusOne CONE, +0.52%.
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