Companies are being pressured to cut dividends, particularly those hardest hit by virus shutdowns — in retail, travel and leisure, but energy is the area most likely to say goodbye to shareholder payouts.
Investors can find ways to avoid the sting of the loss of quarterly dividends by steering clear of the highest-yielding stocks, since many are "yield traps" and could be more likely to cut, according to Bank of America.
Dividends of utilities are seen as secure but the stocks are pricey, so investors may want to hunt for yield in big-cap names in other sectors such as technology and financials, said Savita Subramanian, head of BofA U.S.equity and quant strategy.
A masked pedestrian carrying water bottles walks past the Charging Bull statue in lower Manhattan on April 02, 2020 in New York City.
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Many companies are cutting their dividends and more are going to have to forgo payouts to shareholders as cost pressures mount in coming months.
However, there are some relatively safe harbors for investors seeking yield.