Indeed, there’s much speculation that blue-blood Dividend Aristocrats such as ExxonMobil and Chevron will eventually have to cut or suspend their dividends. But some observers don’t think that will happen.

“We question whether Exxon would do that because even though it’s paying slightly more than 100% of its earnings in the form of dividends, it has the cash flow to support that dividend,” Stovall says. “And Exxon knows that it has turned off the growth investors, so does it really want to turn off the income investors, too?”

Like with any investment focus, due diligence is the key to finding the best dividend opportunities.

“Whether it’s a dividend stock or any stock, you need to really understand the profitability of the business in order to understand its viability,” Trainer says. “The big takeaway here is that income statements and pro forma earnings numbers are not accurate representations of profitability. Investors need to study the balance sheets and all of the footnotes in the filings to get a complete picture on the profitability of the business. If you don’t do that, you take undue risk. And you might get away with that for long time periods, but in markets like this you don’t.”

Trainer recently screened companies with fairly high dividend yields and negative free cash flow to find those with the riskiest dividends. That list includes Occidental Petroleum, ViacomCBS, Prudential Financial, GlaxoSmithKline, Hewlett Packard Enterprise, Pfizer, MetLife, General Motors, Broadcom and Duke Energy, among many others.

“If their free cash flow was negative over the prior 12 months when the economy was much better than it is today, then they will likely have poor free cash flow in the future,” Trainer says.

He offers that the recently departed bull market enabled investors to take on more risk because they didn’t see the incremental consequence of that added risk.

“You don’t get reward without risk,” Trainer says. “But after recent events, investors will probably be more cautious. That said, it will depend on the duration and severity of this downturn. If the market in the next month or so is back to where it was, people will probably say, ‘What an overreaction,’ and they’ll be right back at it.”

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