Three Safe Dividends In A Rocky World

Our world has been rocked…

Our social lives, work lives, and financial lives have all been affected.

The markets went careening over a cliff and then bounced hard last week.

My professional world – the world of dividends – has been especially shaken.

The government’s $2 trillion stimulus package specifies that any company that receives aid cannot pay shareholders dividends until the loans are paid back.

With or without federal aid, some companies may not be able to afford dividends as their revenue and cash flow dry up. Boyd Gaming Corp. (NYSE: BYD) suspended its dividend, as its casinos have been closed to help combat the spread of the coronavirus.

Delta Air Lines (NYSE: DAL) and Boeing (NYSE: BA) also suspended their dividends even before the details of the bailout packages were released.

Making dividends even more precarious is the fact that companies (and management teams) won’t be punished for suspending or cutting dividends the way they might have been a few months ago.

Companies that were struggling a bit but maintaining their dividends for the sake of not angering shareholders now have an excuse for lowering the payouts.

So it’s more important than ever to find companies whose dividend payouts are safe.

Using The Oxford Income Letter‘s SafetyNet Pro tool, which rates dividend safety and has now been adjusted to take into account the dramatic effect the coronavirus has had on businesses, I compiled a list of the safest dividends.

Here are three of them…

Raytheon (NYSE: RTN): Unfortunately, the war business is alive and well and will not be obsolete anytime soon. Raytheon makes missiles, missile defense systems, artillery fire-control systems and many other technologies used in defense.

The coronavirus is unlikely to lower the demand for defense. Free cash flow is forecast to grow to $3.72 billion from $3.53 billion last year. Raytheon is expected to pay out $1.14 billion in dividends, so the company will generate plenty of cash to pay and raise the dividend.

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