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How will dividend stocks respond to COVID-19?
The volatility fueled by the coronavirus outbreak is reminiscent of prior periods of market stress in which investors worried that dividend-paying companies would decrease or suspend their payments. Although 2020 could prove to be the most challenging year for dividend payers since the financial crisis, the sector make-up and impact of dividend cuts should be different. Additionally, many companies appear financially healthy and therefore able to maintain, increase or initiate dividends, despite the uncertainty. Our outlook for dividend sustainability is thus cautiously optimistic.
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