06-29-2022, 07:24 AM
I have a full MO position myself and it's my largest income provider, at least in my Taxable Account. I don't own it in the IRAs - ABBV beats it overall.
It's the sort of company that I think will give plenty of warning signs before cutting. Payout ratio will be the first danger sign for me - and over a couple of years, not quarters. Minor, penny-a-quarter annual hikes will be another. Raising debt to maintain the dividend a third. It will try to maintain as long as it can.
If the time comes where I think a cut is a real risk I'll start slowly reducing my ownership, likely down to about a half-position. Will I like swapping out 8-9% yield for 3-4%? Not at all. But I did it with T and it didn't hurt me much. For now I consider the dividend safe.
It's the sort of company that I think will give plenty of warning signs before cutting. Payout ratio will be the first danger sign for me - and over a couple of years, not quarters. Minor, penny-a-quarter annual hikes will be another. Raising debt to maintain the dividend a third. It will try to maintain as long as it can.
If the time comes where I think a cut is a real risk I'll start slowly reducing my ownership, likely down to about a half-position. Will I like swapping out 8-9% yield for 3-4%? Not at all. But I did it with T and it didn't hurt me much. For now I consider the dividend safe.