Should You Buy Big Dividend Paying Stocks?

Some dividend-paying companies have seen their yields rise in 2020.

For those looking for income, it’s a lure to see yields of 4% or 6%.

Big Oil Slide

The energy stocks got crushed in the March coronavirus sell-off as crude plunged to multi-decade lows as the economic lock downs hit around the globe.

But they also had one of the largest rallies off those lows, with many stocks doubling and tripling into June on the recovery hopes.

Since June, however, the sector has been in another slide. And that slide picked up speed during the stock market’s September correction.

The Energy SPDR ETF fell 17% over the past 3 months and is now down 49% year-to-date.

Still Paying Dividends

The Big Oil companies, however, have one thing going for them.


They continue to pay dividends despite a steep decline in earnings for 2020 and a slow recovery expected in 2021.

Those dividends look pretty juicy for those looking for ways to generate income in an era with the 10-year treasury under 1%.

Chevron (CVX - Free Report), which was just upgraded to a Buy at Bank of America, is paying a dividend-yielding 7.2%. Shares have fallen 16% over the past month which has pushed the yield even higher.

ExxonMobil (XOM - Free Reportis currently yielding nearly 10% but the shares have fallen 21% over the past 3 months and are threatening to test the March 2020 lows again.

BP (BP - Free Reportis another Big Oil company whose shares have taken a hit. They’ve sunk 22% over the past 3 months and are staring at the March lows again as well. It pays a dividend-yielding 6.8%.

Looking Outside of Energy

There are other sizable dividends outside of energy as well.

Pfizer (PFE - Free Reportis paying a dividend-yielding 4.2% but long-term investors haven’t made out. The 5-year return is just 9%, which is well under the return of the S&P 500 for the same time period, of 71%.

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Disclaimer: Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the  more

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