A chart with last Sunday's Market Beat column misstated the dividend of MetLife. Ford Motor Co. reduced its per-share cash dividend last year as part of a financial restructuring plan. The restructuring did not result in lower dividend income to Ford shareholders at the time. If it's income you want, it's available from stocks that pay regular cash dividends. Stocks, even those that have paid steady dividends for decades, provide no guarantees at all about the security of their dividend or about your principal.
Stocks are risky.
A key reason many companies have paid cash dividends over the years is to reduce the perceived risk of owning their shares. A dividend, by contrast, is cash that comes back to you each quarter from the earnings the company generates on your behalf. For most of the last century, dividends held a place of high esteem in the investment world. Many firms still paid dividends, but annual increases became less generous. Even as companies turned stingier with dividends in the 1990s, share prices zoomed.