With tough times come tough measures, which helps to explain why a number of companies have initiated job cuts. However, organizations that already pay their shareholders dividends are reluctant to cut them, as such a move would yield substantial criticism. In other words, even when the going is tough, dividends may stick around.
It’s not just about management being unwilling to sacrifice passive-income opportunities. Rather, companies that provide dividends tend to perform better during recessions than purely growth-oriented businesses.
Finally, the lion’s share of stable firms providing passive income streams to their stakeholders are tied to businesses with a strong and established track record. Instead of relying on aspirational narratives, these dividends come from actual net profits.
For savvy investors, looking at undervalued income stocks to buy for safety could be a smart move.
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