Common misconception: 111% dividend yield? So you’re telling me, in a year, I’ll get my money back just from dividends? Technically correct. But also not. It’s tempting, but here’s why it’s not 100% reliable. Let’s rewind. What is a dividend yield? It’s the annual cash return (dividends) on your investment. Dividend yield = dividend payment…
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Companies are hesitant to bring back the dividend
To conserve cash at the start of COVID, nearly 190 U.S.-listed companies stopped paying dividends. Seventy-two of those companies still haven’t brought back their dividends, including: Disney — which is trying to reduce its debt load from its $71B Fox purchase. Boeing — which isn’t planning on reinstating its dividend until its cash positions improve…
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Cash cows outperform the market in 2022
2022 is all about cash cows — companies churning out abundant free cash flow. These stocks have outperformed money-losing businesses, and here’s one explanation why. In a recession, survival is key. Without free cash flow, companies must rely on raising capital (debt/equity) to survive — and it gets much harder to raise money during a…
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