Avoiding Dividend Cuts: Insights From the Number Crunchers

“Learn to see in another's calamity the ills which you should avoid.” Publilius Syrus For investors with a dividend strategy, dividend cuts are skunks at the party, stinking up everything from current income and future income growth, to total return, reinvestment risk and future stock-picking confidence. Calamity indeed. Not long ago, SA initiated a superb forum, moderated by David Van Knapp, inviting readers to air their choices for the next dividend skunks. It is a firing line of informed opinions, practical experience and good old-fashioned arguing. Recently, David Fish began shipping the firing line more ammo: dividend growers that delayed their hikes beyond the normal anniversary date. And soon enough, Dividend Achiever Hudson City Bancorp (HCBK), one of 10 or so stocks flagged by the forum, went on to cut its dividend. Great stuff, that’s for sure. And it aroused my curiosity. What might hard numbers tell us about predicting... Read more