Three Safe Dividends In A Rocky World

Raytheon currently yields 2.6%.

Snap-on (NYSE: SNA): Snap-on makes tools for the automotive, aviation and mining industries, among others.

It’s too early to tell how Snap-on is doing during the shutdown, but typically during difficult economic times individuals and businesses elect to fix vehicles and machinery rather than buy new ones.

And with an emphasis on holding on to cash, that trend is quite likely to continue over the next few quarters.

Free cash flow is expected to soar 30% this year to $746 million. Meanwhile, the company is projected to pay out $231 million in dividends. So even if free cash flow is a little lighter than forecast, Snap-on will have plenty to fund the dividend.

The toolmaker yields 3.8%.

Waste Management (NYSE: WM): Unless we’re ready to let garbage pile up on the curb, Waste Management should be just fine.

The trash disposal company is estimated to generate $340 million in free cash flow in 2020 while paying out $142 million in dividends.

The company’s volumes may decline a little, as people are consuming less, but it’s hard to imagine its cash flow being so brutally impacted that its dividend would be in jeopardy.

And once social restrictions are lifted, there will likely be so much consumption that we will create even more mountains of garbage for Waste Management to haul away.

The stock yields 2.2%.

All three stocks are rated “A” by SafetyNet Pro.

 

Dividend Grade Guide

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