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The trading halt came just after 3 p.m. on Tuesday. Activity in Anadarko Petroleum Corp. (APC) shares froze … and investors everywhere wondered what the pending news would be.
Shortly thereafter, APC confirmed the worst. It would slash its quarterly dividend by 81% — to just 5 cents a share from 27 cents a share previously. The energy company desperately needs cash in this era of low oil and gas prices, and the move is designed to save $450 million annually.
APC is far from alone, too. ConocoPhillips (COP) just cut its dividend by 66%. Marathon Oil (MRO) slashed its payout by 76%. And these aren’t just a few cherry-picked examples. A whopping 394 companies   reduced their dividends last year. That was up sharply from 243 a year earlier and the most since the Great Recession year of 2009 (527).
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| Dividends are great for investors — but they’re no sure thing. |
A separate analysis by Goldman Sachs Group (GS) concluded that institutional investors are expecting overall dividends to rise by just 1.3% this year. That would be the smallest increase since 1950.
This just goes to show how important dividend stability is. You can’t just look at dividend yield and conclude a stock is a good buy. You have to evaluate the fundamental health of the company, the industry it operates in, and other factors to confirm that yield won’t go up in a puff of smoke!
Our Weiss Ratings can definitely help. They provide independent, conflict-of-interest-free evaluations of a company’s fundamental strength. Those with ratings in the “A” and “B” categories are considered “buys,” and have passed our rigorous screens.
In fact, I take the Weiss Ratings under consideration when I make recommendations in my Safe Money Report. But I also go a step further, conducting my own fundamental, technical, sector-based and sentiment-based analysis.
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That analysis helped me identify a select handful of higher-yielding, lower-volatility stocks in non-economically sensitive sectors, which I recommended to my readers in the past several months. I’m happy to report that they have vastly outperformed the averages in these turbulent times, and that they are continuing to spin off above-market — and reliable — dividends.
Those recommendations are here. Or just be sure you do your yield-hunting in sectors like consumer non-durables and utilities rather than energy, materials, transportation, industrials, and financials. That’s where I see yields that are both generous and sustainable.
Until next time,
Mike Larson
P.S. The last time oil prices sank below $50 a barrel, the best oil and energy stocks handed investors like you TRIPLE-DIGIT profits! The world’s best oil and energy companies are now HUGE investment opportunities — and you can buy all the shares you want for 50% to 90% off the recent price! Click here for my free report now!
Recommended Articles by Mike Larson:
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Companies in any field that provide at some point a commodity can have very roller coaster performance, whether it is grain, oil, or metal. Companies that buy commodities then use them to finish their product, in this case companies that only refine and/or transport oil products will always add their costs onto the price they pay for the commodity. Their profits based on value added should remain fairly steady except in a bad overall economy. In other words companies that find and pump oil out of the ground will see bad times right now, but those companies that refine, transport, and/or sell the final product only should be better investments for stable dividends. But in the stock markets you pay your quarter, get the three balls, aim and throw and take your chances on hitting the target, sometimes you get the quipie doll and sometimes you don’t.
Hi Mike. My concern is that in a true bear market, which is what I feel certain we are into, even the best stocks can get drug down without reason. Just like a bull market lifts stocks in general, so a bear market can be a drag on all stocks as a whole. Capitulation can be broad as well as deep rooted. Agree that this is a good time to become informed and prepared, but shouldn’t we be sitting in cash on the sideline at this time? The first year or two of dividends can easily be offset by the purchase price deteriorating below any dividends received.
It is true that a falling tide will sink all boats to a point. My fund has recently made a play for BHP Billiton in Australia for several reasons. 1. The price collapse is deeper and goes further back than ten years ago. 2. It is a currency play that will also deliver benefits. 3. The anticipated yield reduction has already been built in. 4. The multiples will give an enormous capital gain with only marginal increases from this point. There are other reasons as well that give balance to our portfolio but at some point risk is better than cash on the table.
Couldn’t agree more. BHP and FCX offer outstanding upside potential. Jim
I saw an interesting article a that explained why the Republicans are going to begin losing big time….. It has to do with the Millennials. It seems that they are fact checking everything the politicians are saying along with their political adds and getting the truth out on social media just as fast…… When compared, the truthfulness of the GOP ads and statements are burning up the fact checking software as it appears they a really hard time telling the truth…. Gee, how unusual, aye? Notice to Karl: Your days are numbered!… :)
Dear Eagle,
Who the !@#!@# has been the master at the helm for almost 8 yrs? Does the name Obama ring a bell? Is he a republican? Remember, he has his Ipod and pen! Shovel ready jobs? Where did the money disappear to…..Chicago Demo machine Bosses? You keep harping on your wonderful Demos. Your GOD Roosevelt stole all of the private gold savings from working class Americans.. under penalty of a 10 yr prison sentence. Maybe the Demos should now steal your gold at less than market prices like Demo Roosevelt. Wake up. Clinton signed the bill that killed Glass-Stegal and also signed a bill into LAW that paved the road for the mortgage bust in 2008/9.
and where was your interesting article another liberal b/s platform you’ve ranted before republicans signed NAFTA into law, then you said republicans forced bill Clinton to sign it….. and so I checked a little closer yes president Clinton signed it but so did 240 other democrats
ya know Eagle495 if the millennials are really doing fact checking then they should be knowing pretty soon hillery Clinton will be indicted and that everything she say is pretty much a complete lie the same thing with Bernie sanders plan to spend another 30 trillion on givaways,………….. anybody with basic math skills realized his numbers don’t match (math ) up
Hi Eagle495
It’s beyond just the Republicans and the Democrats. All of them bend the truth and promise stuff until they get your vote. This is why there’s a groundswell revolt developing. People want honest, capable and motivated leaders and there’s not a lot to pick from.
Yea, the 97% are realizing, especially through social media how they have been screwed since Reagan, during the Republican Revolution….. Can anyone on this site tell me of a few good things that happened to the 97% during the Republican Revolution which ended with the Crash of 2007-2009?
You mean the Obama years? We got forced into Obamacare and our rates tripled.
That is a lie… Show us where a reputable source has proven that statement…
everything you say is a lie or twisted eagle495 go back to england
Eagle 495
For the work that I do it is necessary to know the demographic breakup of each country. There is no 3% and 97% as you suggest. If you really are interested and just as a simple guide, look up Demography of the United States – From Wikipedia, the free encyclopaedia. It’s a bit of an eye opener with most Politian’s listed among the top 5%.
Howard,
Thanks… Depends on what source you are reading and the area if research….. 97/3 or 95/5, it still comes out the same… The 97%/95% are all worse off since the Republican Revolution in 1981 and the ONLY people who gave gotten wealthier are the 3%/5% who have given incredible amounts to get those elected that would take from the common man and give to the wealthy man…
eagle495 Obama promised jobs, he promised he would hit the ground running, he promised shovel ready jobs , he promised 6% or more growth in the economy every year he was in office, he promised a balanced budget , he promised the most transparent govt. ever and that he would bring us closer together and what did we get lies about bengazi , coverups a doubling of the national debt , a president who thought because he had a pen and a phone he could write executive orders to do his best to corrupt or destroy the bill of rights and the constitution and now as a people we are more divided than ever with his divisive ways
Clinton signed into law the bills that caused the 2008/2009. How about brushing up on the facts. So you discover the “FACTS” through social media. !!!..Really…!!!
you mean liberal social media after they tell lies and twist the truth like you do eagle495
495:
Yeah….and I read that a lot of Millennial women have started reading all about Hillary and how she trashed all of the women that complained about Bill’s molestations. She was part of the coverup from day one.
But you are correct about the Millennials preferring the Democrats. Butttt……the numbers are not that great. The difference is the huge number of Independents in that particular cohort.
BTW….you could look at another cohort, Asians and Caucasions…….they vote Republican.
But if the Dems pick the avowed Socialist (or is he a communist as Trump asked?)…..they will lose big time.
One last note….many people (including yours truly) were liberals in their youth. Most grow out of it.
Republicans and Democrats are slipping. There are more Repubs in office nationally than anytime since the Civil War. Only about twenty five per cent of Americans describe themselves as Liberals. They are both losing their own bases. The Repubs are discredited Neo-Cons, the Democrats Welfare State dinosaurs. A Trump-Kasich ticket walks into the White House. Jim
Actually Jim, the last time the 3% invested this much money into getting Republicans/Conservative elected was from 1923-1932….
And just to keep history straight, during the Civil War the Republicans were the Liberal Progressives and the Southern Plantation owners were the Conservatives known then as Democrats….
Lincoln was a Progressive Liberal…. Another lie that keeps coming from the current day Republicans/Conservative, is that they are “The Party Of Lincoln, inferring that Lincoln was a Conservative, which, or course, is another current day Republican lie….
actually the liberals spent something like 2 to 1 on trying to get elected in the last election and the lost big REAL BIG
This is an investment newsletter. Please keep your useless political crap and posturing to yourselves.
Political crap has a profound effect on our investing. Jim
And you have something else to contribute Frank?
Actually Frank, if you were a successful investor, you would know that the political party in control has a profound effect of Investment return….. Do some research, aye?…
YEA ….. and how is that going with barack Obama a democrat who is on his 8th year as president of the united states ……….. anemic growth at best the 1st quarter of 2016 is only scheduled to grow at a robust 0.3% and the 4th quarter of 2015 we were having explosive growth of 0.5 % I gotta ask you this eagle495 where were those promises of 6%+ or more growth in the economy for every year that barack Obama was president in the white house … he promised it to you ….. I mean you fell for it you voted for him twice . the rest of us here had enough common sense not to fall for his B/S
Buy hard assets. Watch. Catch the next (or later) train.
After noting vanishing dividends of the major energy companies, Mike brags above, “In fact, I take the Weiss Ratings under consideration when I make recommendations in my Safe Money Report. But I also go a step further, conducting my own fundamental, technical, sector-based and sentiment-based analysis.”
The last time Mike embraced an up and coming sector was exactly 1 year ago, when he touted….
Greatest Energy Opportunity in 3 Decades
Monday, May 18, 2015 at 7:30 am
Mike: …What you saw then and what you’re seeing right now, is just the first phase. And like we said at the outset, after the first phase, big-cap names like Exxon and Chevron can roughly double in the next year and a half. Plus smaller bargain-basement names can triple and quadruple, just like they did in the late 1980s. (5/18/15)
Mike: I’m conservative by nature. But in my opinion, these opportunities are too great to pass up. So since January, I’ve been finding one new amazing bargain after another and telling my readers to snap them up. Even if you don’t catch the exact bottom and even if you don’t pick exactly the right stocks, you can most likely do well. And if you know where to look, when to act, and how to buy smart, you can make an absolute killing. (5/18/15)
Energy has been an absolute killing, all right. If investing were subject to criminal laws, there would be an arrest warrant out for Mike as a serial killer.
ive done pretty good lately working the swing market on energy plays on southwestern energy , consol energy , range resources corp, devon energy, concho resources, and whiting petroleum co. except whiting petroleum scares the —- out of me its losing money and over fist but when you get the oversold signals consider buying but don’t hold it too long