Eq: Large Cap

(New York)

Income investors have been frightened by the extent to which the current Coronavirus downturn is going to cause an economic downturn and thus a big cut to dividends. The only good news on this front recently has been that companies are suspending buybacks before dividends. In assessing the damage, Goldman Sachs says overall dividend payouts are going to be slashed by 25% this year. That figure includes a 38% fall for the next nine months added to the 9% rise in dividends in the first quarter.


FINSUM: This is big, but it would be far from catastrophic levels.

(New York)

Anyone paying any attention to the economy or markets knows dividends are in trouble. With the economy set to shrink 30% in Q2 and a likely big negative growth number for the year, companies are going to have a very hard time maintaining profitability and dividend levels. With that said, here are some stocks that should have safe dividends. Texas Instruments and CVS both look attractive, yielding 3.6% currently, as does Intel (which yields 2.5%).


FINSUM: The brightest news for investors is that many companies have announced a suspension of buybacks but have plans to maintain their dividend, so there should still be some decent income.

(New York)

Many have been wondering when junk bonds were going to start feeling pain. Despite the previous risk of recession, junk bonds did quite well over the last several months. However, since the big flare up over coronavirus, they have started to be seriously wounded. On Friday, junk bond spreads to Treasuries were at 366 bp—very low. As of yesterday, they were at 418 basis, a 50bp+ rise in two trading days, showing how much investors fear the economic impact of coronavirus.


FINSUM: We think these spreads are going to keep moving higher, even if stocks level out. Bond investors are a suspicious bunch and an economic slowdown would hit high yield companies harder than average.

Page 1 of 79

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…