The market needs to brace itself for more dividend cuts. Investors need to tread carefully investing in retail REITs, banks, or energy. If you’re investing in the spaces, it’s likely that dividends aren’t your top priority. A multi-year turnaround plan sounds plausible.
Wells Fargo Cutting Its Dividend this Month
It’s expected that Wells Fargo (NYSE:WFC) will partially cut its dividend in Q3 to comply with the Federal Reserve’s stress tests. It will announce the new dividend when it reports quarterly results on July 14.
In the last great recession triggered by a financial crisis about 11 years ago, the stock traded as low as a P/E of 5 based on normalized earnings. That would imply a buy target of about $18 — if you’re looking for a multi-year turnaround play.
As recent as August 2019, Inter Pipeline (TSX:IPL) received a takeover bid – that it rejected – of CAD$30 per share. Who would have thought that the company would trade at only a third of that price today?
Personally, I avoided the stock for reasons that were unrelated to the headwinds that it and other energy infrastructure companies are facing today.
Specifically, I saw that Inter Pipeline had project concentration risk, as its major Heartland Petrochemical Complex project made up about 95% of its capital program at the time.
Inter Pipeline had project concentration risk, as its major Heartland Petrochemical Complex project made up about 95% of its capital program at the time.
If you’re new to dividend stock investing, you’d want to wrap your head around what a good dividend yield is. In this video, I’ll use real-world examples, including Johnson & Johnson (NYSE:JNJ), Apple (NASDAQ:AAPL), General Electric (NYSE:GE), and Simon Property Group (NYSE:SPG).
You’re probably interested in investing in dividend stocks if you’re here to learn about dividend yields and want to know what a good dividend yield is.
I’ll first explain what a dividend yield is, and what affects it. Then, I’ll follow with a super simple example as well as real-life examples, introducing some safe dividend stocks and their dividend yields.
Second, I’ll explain the difference between dividend yield and yield on cost and why they’re relevant to investors.
Third, I’ll give examples on what makes a good dividend yield, as you may be wondering if, say, a 5% yield is better than a 2% yield. I can tell you right off that that it’s not always the case.