Dividend Stocks Are Back! | Reinstating & Rising From The Dividend Cuts

Dividend stocks are back baby!  Now that earning releases are coming into full swing and businesses had time to reach and adjust due to COVID-19, results are much better than expected.  In fact, some companies are making even more money now than. before the pandemic.
 

dividend stocks are back


As a dividend investor, I witnessed many dividend stocks cut their dividend.  I am not talking just dividend cuts, but also dividend removals.  We are now a surprising 8 months of battling COVID-19.  There are signs that dividend stocks are back, as dividend increases have resumed.


Dividend cuts

Remember my article, Pandemic Dividend Cuts Sting Deep? I lost over $814+ in forward dividend income due to dividend cuts.  As an investor or someone who wants to use dividend income as their primary source of passive income, this hurt.  Financial freedom took a few steps back during the early part of 2020.

Why did the cuts happen?  Companies wanted to preserve capital, reduce outflow of cash and stay as liquid as possible.  The first few months of COVID-19 brought much uncertainty and companies had to react accordingly.

Therefore, in an effort to survive the global pandemic, companies either reduced or completely cut their dividend.  However, as we have started to see, survival did occur for many companies, as dividends are coming back for many!a

In that sense, I believe dividend stocks are BACK and the dividend income is ready to grow again!  Dividend growth is extremely important on the journey to financial freedom and investors should feel more confident moving forward.


Dividend Increases after Dividend Cuts

Listed below are dividend stocks that have increased their dividend, subsequent to COVID-19 dividend cuts.  I’ll go over a few headliner companies and show you what they did during the early stages of COVID-19 and what they have done to their dividend since then.

Wendys (WEN): First, they reduced or cut their dividend from $0.12 per quarter, down to $0.05 per quarter.  This was a significant 58% wallop to their dividend!  Income investors definitely felt the pinch, but those Wendy’s longs have never looked longer.  Business is doing very well, as Wendy’s was now able to INCREASE their dividend from $0.05 per quarter to $0.07, a 40% jump.  Don’t let the number or the percentage increase fool you, as a 40% increase is only $0.02 and the dividend is STILL lower by $0.05 or 42%.  However, nice to see the dividend coming back!
 

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Disclaimer: I do not recommend any decision to the reader or any user, please consult your own research. Thank you.

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