Dividends: The most and least secure for 2009
For two contrasting takes on dividend stocks, check out Barron’s Best Dividend Plays for 2009 (as reported on Seeking Alpha) and AB Analytical Services’ list of stocks with Dividends on Death Row.
Among the stocks in the first group – those that Barron’s feels have reasonably secure dividends – are Altria Group [[MO]], Bristol-Myers Squibb [[BMY]], AT&T [[T]], Kraft [[KFT]], PPG Industries [[PPG]] and Whirlpool [[WHR]].
AB Analytical Services on the other hand takes a rather dim view of the debt and liabilities on many non-finance dividend-paying companies’ balance sheets and attempts to identify stocks with high dividend yields that are at the greatest risk of being cut. Among the stocks on this list are Altria Group [[MO]], AT&T [[T]], Avery Dennison [[AVY]], Dupont [[DD]], Vulcan Materials [[VMC]], General Electric [[GE]], and Black & Decker [[BDK]].
Some of the stocks on this second list are no surprise – GE for example. (In fact, at this point it will be more of a surprise if GE doesn’t cut their dividend.) However, you’ll notice that two stocks on the list – Altria Group and AT&T – are also on Barron’s list of stocks with “reasonably secure dividends,” so it will be interesting to see how this all plays out.
Until then I’m inclined to take such balance sheet concerns seriously. Given the current market and economic climate, a “guilty until proven innocent” approach in this regard toward dividend stock selection might mean avoiding the pain of a dividend cut down the road.
Related posts:
Stocks headed for a dividend cut
Pfizer after the dividend cut: Still worth a look?
General Electric: Once and future dividend grower?
