The incredible disappearing dividend

Posted Nov 26th 2008 9:45AM by Douglas McIntyre
Filed under: Market Matters

For decades now, when there has been a stock market downturn, shares may have lost their value, but investors could always rely on big companies to pay dividend to get some return.

Not anymore, and that makes life for the individual investor even harder.

According to Bloomberg, "Stock dividends are disappearing at the fastest rate in 50 years as the worsening recession forces U.S. companies to conserve cash."

The credit crisis makes it hard for firms to borrow, so they keep what they have on hand. Banks, traditional big yield stocks, may not get their balance sheets in shape for the rest of the decade.

The return of dividends could take a year or two.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Tags: dividend, inthenews

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Reader Comments (Page 1 of 1)

11-27-2008 @ 10:44AM

Joseph L. Greene said...

You forget that Oldsmobile was discontinued. So, years ago, was LaSalle. This is survival at stake. I believe that brand loyalty over the dropped names will be overcome in time.
Hey! I'm an old guy. I've owned Renault, Peugeot and Fiat. You feel like a jerk for a while selecting a brand that doesn't have legs but you get over it. In this case the company must do everything that's necessary to continue. Maybe it should be Chevrolet and Cadillac as the survivors in a made over GM.