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OUSA: A Solid Dividend Fund

Dividends Are Never a Guarantee. These 3 Stocks Made Massive Cuts to Their Payouts This Year


Published on 2024-11-29 06:00:59 - Thomas Matters, WOPRAI
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  • Dividend stocks can be attractive options for long-term investors, in part, because of the recurring income they can generate. But investors need to remember that dividend payouts

The article from The Motley Fool, published on November 29, 2024, discusses the risks associated with dividend stocks, particularly focusing on the possibility of companies cutting their dividends. It highlights that while dividends can provide a steady income stream, they are not guaranteed, and economic downturns or company-specific issues can lead to reductions or eliminations of payouts. The piece mentions several companies that have historically cut dividends, including examples from the energy sector like BP and Shell, which reduced dividends during the 2020 oil price crash. It also points out that high dividend yields can sometimes be a red flag, indicating potential financial distress rather than a lucrative investment opportunity. The article advises investors to look beyond just the yield, considering factors like the company's payout ratio, free cash flow, and overall financial health to assess the sustainability of dividends.

Read the Full The Motley Fool Article at [ https://www.fool.com/investing/2024/11/29/dividends-guarantee-stocks-cut-payouts-2024/ ]

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