I'm Worried About MO

[fenders53]

(06-29-2022, 07:24 AM)cemanuel Wrote: 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.

As long as MO can hold 40 it seems worth holding.  If it trends down towards 30 then not so much.  The dividend is to attractive.  At some point news fades and it tries to recover.  I do hear people talking about $60 price targets when it runs a little.  That seems delusional.  The government will jump out of the bushes and knock them down every time.  My MO is in an IRA so it's a little easier to change my mind on price swings.