- Dividend-paying stocks face pressure on many fronts today.
- Fundamental research and diversification are the keys to investing in income-oriented companies.
- Given ultra low interest rates, dividend payouts remain a crucial source of investment income.
With much of the world in quarantine, dividends are at a crossroads.
As much of the global economy remains essentially shut down, many companies face tough choices when it comes to returning cash to shareholders. Dividend cuts and suspensions have jumped to the highest level in more than a decade. But even in this environment, some companies have maintained payouts and even raised them.
More than ever, this divergence in dividend commitment emphasises the need for stock-specific research to help identify high-quality companies that can weather the storm. Interest rates also remain ultra low in developed markets, further underscoring the need to find companies that can generate sustainable income for investors.