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Safe dividends are out there, just harder to find

Standard & Poor’s senior index analyst Howard Silverblatt still believes in dividends. However, in a recent S&P video commentary he notes that in the current environment – in which dividend cutting has become acceptable – finding stocks with reasonably safe dividends isn’t easy.

But, he says, they’re out there.

To help investors navigate through the current dividend minefield, S&P has prepared a dividend starting list of 142 companies with some or all of the following qualities:

  • A strong dividend history
  • Still increasing dividends
  • Strong earnings coverage
  • Expected to continue to be profitable with high dividend coverage rates

Some of the companies on the list that exhibit all four of the above qualities include Abbott Labs (ABT: 50.49 -0.49%, yld: 3.31%), 3M (MMM: 82.14 -1.61%, yld: 2.50%), AFLAC (AFL: 49.92 -2.00%, yld: 2.20%), Archer-Daniels Midland (ADM: 31.39 -1.91%, yld: 1.84%), Emerson Electric (EMR: 49.76 0.00%, yld: 2.69%), Johnson & Johnson (JNJ: 58.70 -0.39%, yld: 3.50%), Pepsico (PEP: 65.48 -0.14%, yld: 2.84%), Procter & Gamble (PG: 60.14 -0.25%, yld: 3.06%), Target (TGT: 52.33 -0.95%, yld: 1.44%), V.F. Corp (VFC: 74.83 -0.99%, yld: 2.38%) and Wal-Mart Stores (WMT: 51.86 -0.35%, yld: 2.27%).

But don’t stop there, says Silverblatt, investors also need to pay attention to companies’ cash flows, business lines and sales, and balance sheets. Ultimately, he reminds us, companies need to be picked first – not yields.

Related posts:
Dividends: The most and least secure for 2009
Stocks headed for a dividend cut
SmartMoney: 5 Dividend Stocks for This Market

This entry was posted on Wednesday, February 18th, 2009 at 4:25 pm and is filed under Dividend Growth Stocks. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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