Dividend Investing During the Coronavirus (Part 1)
Fear and uncertainty are high, but this dark cloud still has a silver lining — maybe. For dividend investors, in particular, these times could offer promising opportunities.
When stock prices go down, dividend yields go up. At its peak of $327, Apple’s $3 dividend represented a yield of 0.91%. Now, with the stock price around $263, the yield has risen to 1.15%
What happens to that dividend if Apple’s fortunes wane? That’s where a strong balance sheet comes in.
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At the end of last year, Apple had $206 billion on its balance sheet. Even with zero net income, the company could pay its dividend — a total expense of $13.8 billion — for nearly fifteen years.
Over at cigarette market Altria, which owns famous brands like Marlboro, it’s a different story. We’ll discuss that in Monday’s edition of ‘The Morning Fix.’
David R. Evanson is a financial journalist in Philadelphia.