The big dividend was a hallmark of the big bull market. It was accompanied by a small yield. Even generous payouts were only a little fraction of the share prices at most companies. Their stocks had gone that high. With share prices down, yields have gone mad.
Deep in the basements of most companies, the accounting staffs are working under orders from the CFO and board of directors to protect the balance sheet at any cost. Preparing for the economic siege of the next several quarters, many firms will send costs, necessary to run the company or not, to the guillotine in increasing numbers.
Now, the dividend is going the way of extinction. Yields are up, for now, but so is debt taken on in the salad days. Cash flow is down. KKR Financial (NYSE: KFN, Stock Forum), which is doing remarkably well, eliminated it dividend yesterday.
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