The coronavirus crisis puts the dividends of these popular stocks at risk

Published Wed, Apr 8 20208:03 AM EDT

(This story is for CNBC Pro subscribers only.) The coronavirus pandemic is causing a devastating blow to overall corporate earnings, putting companies' dividend payments under pressure. This comes at a time when many investors are starved for income in these volatile markets. Here are some companies most immediately at risk of having to cut their dividends, according to Credit Suisse. Many investors have relied on dividend-paying stocks for a reliable income stream in the current low-rate environment, but the steady payments are threatened in the face of the outbreak that has virtually shut down the world economy. "A growing number of corporates are moving towards preserving cash in the current more difficult macro context," Michel Lerner, an analyst at Credit Suisse. "Even stocks that might have been considered to have 'safe' and reliable dividends may not quite make the cut anymore." Credit Suisse screened for companies with a dividend yield above 3%, but with negative gross cash flows and ranking in the bottom 40% in its proprietary quantitative value calculations. These stocks are most at risk of cutting or suspending their dividends, according to the bank. Some stocks from Credit Suisse's screen have already announced dividend suspensions or cuts to preserve liquidity in the wake of the pandemic, including Occidental Petroleum , Boeing and Delta Airlines. The bank's list of stocks include some of the hardest-hit companies amid the pandemic, such as cruise lines and airlines. Shares of Royal Caribbean Cruises and Carnival both tumbled more than 70% this year. Delta Airlines dropped more than 60% in 2020. "We believe investors should ... avoid high dividend payers with stretched balance-sheets, and focus on businesses where dividend payments are sustainable and the icing on the cake of an otherwise strong fundamental story," Lerner said. Others on Wall Street are also predicting a drop in overall dividend payments as the pandemic wreaks havoc on corporate profits. For example, Goldman Sachs expects the S & P 500 dividend payout to drop 25% this year. Energy companies in turmoil Credit Suisse believe many energy companies will likely be forced to cut dividends, including Halliburton, Valero Energy, Chevron, OGE Energy and Centerpoint Energy. U.S. West Texas Intermediate crude has slid 59% this year as the coronavirus outbreak has sapped demand. The plunge hammered the highly-leveraged energy sector as producers struggle to break even with lower prices. Occidental announced last month a 86% reduction in its shareholder payout as the debt-laden U.S. oil producer tries to save cash amid tumbling energy prices. To be sure, some energy companies have vowed not to slash dividends despite mounting pressure, cutting costs in other areas. Chevron CEO previously said dividend is the company's No. 1 priority and is "very secure." Shares of Chevron have fallen more than 30% this year. Exxon Mobil is cutting its capital spending by 30% but the company is "committed to maintaining" its dividend, CEO Darren Woods said Tuesday on CNBC's "Squawk Box."

(This story is for CNBC Pro subscribers only.)

The coronavirus pandemic is causing a devastating blow to overall corporate earnings, putting companies' dividend payments under pressure. This comes at a time when many investors are starved for income in these volatile markets.

Here are some companies most immediately at risk of having to cut their dividends, according to Credit Suisse.