942 views|Apr 26, 2020,07:24am EDT
5 Safe S&P 500 Dividends Up To 8.5%
Brett OwensContributor
Investing
PETER DAZELEY
In normal times, we contrarians are stuck combing the market’s backwaters—REITs, closed-end funds (CEFs) and the like—in our hunt for outsized dividends.
But, of course, these are not normal times.
This crisis has flipped the script. Now we can get the same big payouts but with much less work. In fact, we can get them from the same stocks you’ll find in any American’s portfolio! This is a once-in-a-generation opportunity, and it can’t last.
Fishing Close to Shore
The last time I saw a situation like this was in March 2009, days before the S&P 500 bottomed in the financial crisis. Back then, the yield on sleepy dividend payer Pfizer PFE (PFE) did something extraordinary: it nearly tripled almost overnight!
Normally the pharma giant’s payout meanders between a 3% and 4% yield, but for a short time in early March 2009, we could buy Pfizer and lock in an 11% income stream!
That unusually high yield stuck around, too. Even if you’d waited till late May, you’d have locked in a nice 7.4% payout, twice what Pfizer usually pays.
To be clear, this huge payout didn’t happen because Pfizer got generous with its cash—it resulted from a drop in the share price as the recession hit.
That brings me to this latest crisis, which has prompted other S&P 500 companies to “pull a Pfizer” and hand us payouts that were unthinkable just one month ago. And because these stocks have been overly beaten down, they give us a shot at price gains, too.
Source:https://www.forbes.com/sites/brettowens/2020/04/26/5-safe-sp-500-dividends-up-to-85/amp/
5 Safe S&P 500 Dividends Up To 8.5%
Brett OwensContributor
Investing
PETER DAZELEY
In normal times, we contrarians are stuck combing the market’s backwaters—REITs, closed-end funds (CEFs) and the like—in our hunt for outsized dividends.
But, of course, these are not normal times.
This crisis has flipped the script. Now we can get the same big payouts but with much less work. In fact, we can get them from the same stocks you’ll find in any American’s portfolio! This is a once-in-a-generation opportunity, and it can’t last.
Fishing Close to Shore
The last time I saw a situation like this was in March 2009, days before the S&P 500 bottomed in the financial crisis. Back then, the yield on sleepy dividend payer Pfizer PFE (PFE) did something extraordinary: it nearly tripled almost overnight!
Normally the pharma giant’s payout meanders between a 3% and 4% yield, but for a short time in early March 2009, we could buy Pfizer and lock in an 11% income stream!
That unusually high yield stuck around, too. Even if you’d waited till late May, you’d have locked in a nice 7.4% payout, twice what Pfizer usually pays.
To be clear, this huge payout didn’t happen because Pfizer got generous with its cash—it resulted from a drop in the share price as the recession hit.
That brings me to this latest crisis, which has prompted other S&P 500 companies to “pull a Pfizer” and hand us payouts that were unthinkable just one month ago. And because these stocks have been overly beaten down, they give us a shot at price gains, too.
Source:https://www.forbes.com/sites/brettowens/2020/04/26/5-safe-sp-500-dividends-up-to-85/amp/