The sustainability of any dividend hinges on the health of the company’s underlying business. Although stock prices may fluctuate with investor sentiment, companies that generate a steady or growing stream of cash flow to support their dividend will ensure that investors get paid to wait for an eventual recovery.
Our Lifelong Income Portfolio has taken its lumps over the past year, with our international equities and energy stocks absorbing the hardest hits. This weakness reflects Uncle Buck’s strength relative to the euro and the Australian and Canadian dollars, as well as the severe downdraft in oil and gas prices.
Quarterly earnings provide investors with invaluable insight into how their holdings’ underlying businesses fared and future growth prospects. How the Market Went from Feel-Good Movie to (Dividend) Slasher Flick analyzed fourth-quarter results from six Lifelong Income Portfolio holdings: