With bond yields falling across the globe, investors may be tempted to seek yield in high-dividend stocks.
The problem? While fixed income investors who hold a bond until maturity will get their payments unless the issuing company or government defaults, equity investors are in a very different boat. A company may simply choose to reduce its dividend or to stop paying one completely.
Recently, investors in Anadarko and ConocoPhillips were painfully reminded of that lesson. Other companies that have recently cut their dividends include Noble Energy and Kinder Morgan; Chesapeake Energy suspended the dividend on its preferred shares, and Marathon Petroleum announced it would reduce the pace of dividend increases.
With oil prices falling mightily, it is probably no surprise that energy companies have looked most vulnerable to dividend reductions.
Yet there are still juicy dividends to be found outside the energy sector. Those yield-seekers who get palpitations at the very idea of investing in a high-dividend energy stock might start their hunt by examining the eight nonenergy companies that pay the highest dividends: