Not every dividend that has survived for decades is actually safe, and one of these four blue-chip names is covering its payout with earnings so thin that a drop in oil prices could change everything.
When you’re drawing income from a portfolio, the check size matters less than whether it keeps coming every year. A blue-chip payout is funded by free cash flow left over after the business reinvests in itself. A stretched payout depends on borrowing, asset sales, or one unusually good year. The four companies below were picked for scale, established market positions and long operating records, and they pay meaningful yields. The leader of the group, Exxon Mobil (NYSE: XOM | XOM Price Prediction), has raised its dividend for 44 consecutive years. The question for each one is whether today’s cash flow actually covers the check.
Exxon Mobil: 44 Years of Raises Backed by Real Cash
Exxon is an integrated energy and chemical giant with a market value of about $763.8B. Its upstream assets include Guyana, the Permian Basin, Kearl, PNG LNG, and Golden Pass LNG, and it also runs refining, chemicals, and specialty lubricants healthcare, and banking, with dividends paid out of real free cash flow and earnings.
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Lee Jackson has covered Wall Street analysts’ equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as <a s journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
