Not all dividends are at risk

By Paul R. La Monica, CNNMoney
2009-1-28 12:24:23

NEW YORK (CNNMoney.com) -- A significant number of companies are slashing dividends to preserve cash.

Comerica (CMA) announced this week that it was reducing its quarterly payout from 33 cents a share to 5 cents a share, making it the tenth S&P 500 company to either cut or suspend its dividend so far this month. Of those 10, eight of the firms are in the financial-services sector.

And while the dividend cuts are probably the right move for these struggling companies, it does hurt investors that have come to depend on income in these wildly uncertain times.

With the market down sharply again so far this year, most investors are probably looking to park their money in stocks or bonds that will provide them a steady stream of cash.

Usually in a period of such tumult. Treasury bonds are a good place to hide. But with the Federal Reserve already lowering interest rates to near zero last month -- and widely expected to leave them there Wednesday afternoon -- Treasurys don't offer investors much in the way of income. The yield on the 10-year Treasury is currently about 2.5%.

	Investment Basic Investment Overview Investment Approache Fundamentals Data Investment Stories www.fxj108.com	Not all dividends are at risk By Paul R. La Monica, CNNMoney 2009-1-28 12:24:23 NEW YORK (CNNMoney.com) -- A significant number of companies are slashing dividends to preserve cash. Comerica (CMA) announced this week that it was reducing its quarterly payout from 33 cents a share to 5 cents a share, making it the tenth S&P 500 company to either cut or suspend its dividend so far this month. Of those 10, eight of the firms are in the financial-services sector. And while the dividend cuts are probably the right move for these struggling companies, it does hurt investors that have come to depend on income in these wildly uncertain times. With the market down sharply again so far this year, most investors are probably looking to park their money in stocks or bonds that will provide them a steady stream of cash. Usually in a period of such tumult. Treasury bonds are a good place to hide. But with the Federal Reserve already lowering interest rates to near zero last month -- and widely expected to leave them there Wednesday afternoon -- Treasurys don't offer investors much in the way of income. The yield on the 10-year Treasury is currently about 2.5%.