No dividend is sustainable unless the company’s underlying business remains healthy and continues to grow. And as long as the payout remains solid, dividend-paying stocks eventually will recover from any beating.
That’s food for thought in a year when many dividend-paying equities have posted meager returns, if not outright losses.
But this underperformance doesn’t necessarily reflect how their underlying businesses have held up.
Only two of our Lifelong Income Portfolio holdings posted third-quarter results that fell short of guidance, with the rest meeting or exceeding these targets. Our holdings sport an average yield of 7 percent, and half have increased their dividends at least once this year.