Global container shipping and logistics company ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) stock has rebounded. Its 49% dividend is a real standout. It makes one wonder why ZIM isn't a no-brainer buy for income investors. The problem is the underlying volatility of the stock and the shipping container industry and the fallacy of dividends.
There needs to be a better understanding of the mechanics of how dividends work concerning the pricing of the underlying stock. It's the "other" problem with ZIM as a pure dividend play.
The Misunderstanding of Dividends
The other fundamental problem to understand regarding dividend stocks is that the dividend is not "free." Often, stocks drop in price by at least equivalent to the dividend price. .
Equity markets tried to move higher for a 2nd day this week only to have the move reversed by midday. The price action is hopeful but weak in the face of mounting bearishness centered on inflation, interest rates, and their impact on the outlook for earnings. A report from Target confirmed again what everyone fears, the wave of strength brought on by the pandemic is fading quickly, and the pullback in consumer spending is about to begin.
The S&P 500 is at a critical juncture. If the index can not regain firm footing by the end of the week, it is in danger of a more profound decline. The action so far this week shows resistance at the short-term moving average and growing bearishness among short-term traders. In the even the index deepens its decline, the next targets for firm support are near 3,900 and 3,800.
Global container shipping and logistics company ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) stock has rebounded. Its 49% dividend is a real standout. It makes one wonder why ZIM isn't a no-brainer buy for income investors. The problem is the underlying volatility of the stock and the shipping container industry and the fallacy of dividends.
There needs to be a better understanding of the mechanics of how dividends work concerning the pricing of the underlying stock. It's the "other" problem with ZIM as a pure dividend play.
The Misunderstanding of Dividends
The other fundamental problem to understand regarding dividend stocks is that the dividend is not "free." Often, stocks drop in price by at least equivalent to the dividend price.
Swiss regulators have found that Credit Suisse made a “serious breach” of law in connection with a now-bankrupt firm linked to Australian financier Lex Greensill and have opened a probe that could lead to penalties against four former bank managers.
Switzerland's financial markets authority, FINMA, said Tuesday that it has concluded enforcement proceedings opened two years ago against Credit Suisse after bank partner Greensill Capital went bankrupt. At the time, Credit Suisse closed four funds linked to the partnership, in which bank clients had invested about $10 billion.
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Dividend stocks come in all shapes and sizes. They all share the objective of providing income to their investors. Dividend stocks can provide a source of income in exchange for taking the risk of holding onto the underlying shares. They are suitable for retirees and investors looking for an extra source of income from their investment holdings.
While most dividend stocks pay quarterly, some pay monthly. These stocks tend to fall into either real estate investment trusts (REIT), financing, or business development companies (BDC). Publicly traded REITs must distribute 90% or more of their operating income to shareholders as dividends.
Capital appreciation is possible if entries are timed well, but depreciation is possible if you chase entries.
In the next 75 days, I predict Americans will face fuel shortages, widespread blackouts, empty grocery shelves, $1000 energy bills, drained retirement accounts… and a new crime wave.
Stocks are edging higher Tuesday as Wall Street closes out what’s been a tough February.
The S&P 500 was 0.3% higher in afternoon trading. The Dow Jones Industrial Average was down 84 points, or 0.3%, at 32,802, as of 12:58 p.m. Eastern time, while the Nasdaq composite was 0.5% higher.
After a strong start to the year bolstered by hopes that inflation was on the way down, Wall Street has shifted into reverse this month. A stream of data has shown inflation and the overall economy are remaining more resilient than expected. That’s forced investors to raise the...
Choosing the best dividend ETF for your needs can be a daunting experience. Moreso when one considers the number of options available to investors.
In saying that, some dividend ETFs stand head and shoulders above others, measured by their total return. In this case, the best dividend ETF is the Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD), which has delivered a 233.34% total return over the last ten years, also beating the total returns of the S&P 500 over the same period.
A key reason for SCHD’s market-beating performance is that total return captures both capital gains and compound dividend reinvestment.
Louis Navellier designed one of the most valuable stock-picking algorithms on the market. A system so precise that it helped him find Apple at $1.49, Microsoft at 38 cents and Cisco at 47 cents. Now that system has helped him rank all five stocks in his latest report - 5 Bulletproof Retirement Stocks – a buy.
Stocks are drifting Tuesday as Wall Street closes out what’s been a tough February.
The S&P 500 was virtually unchanged in late trading. The Dow Jones Industrial Average was down 166 points, or 0.5%, at 32,721, as of 3 p.m. Eastern time, while the Nasdaq composite was 0.4% higher.
After a strong start to the year bolstered by hopes that inflation was on the way down, Wall Street has shifted into reverse this month. A stream of data has shown inflation and the overall economy are remaining more resilient than expected. That’s forced investors to raise their fo...
Flexible workspace company WeWork, Inc. (NYSE: WE) went public through a reverse merger with a special purpose acquisition company (SPAC) called BowX Acquisition Corp in September 2021. The company commits to long-term leases with building owners and undertakes extensive buildout and modernization to create contemporary and engaging full-service office environments.
It then subleases the workspaces to companies and individuals. The concept and design were exceptional, but the company overleveraged itself, burned through cash, grew massive debt, and was susceptible to rising interest rates a...
Consumer confidence dipped for the second straight month as stubborn inflation and anxiety over a potentially slowing economy weighed on Americans.
The Conference Board reported Tuesday that its consumer confidence index slipped to 102.9 in February, from a reading of 106 in January.
The business research group’s present situation index — which measures consumers’ assessment of current business and labor market conditions — ticked up to 152.8 from 151.1 last month.
The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — tumbled to 69.7 in February from 76 in January.
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