Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

A recent study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2022). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

Sometimes, companies are forced to cut their dividends for many different reasons. While it is often the death knell for some stocks, for others, it’s a relief as cash flow gets a breather and management can focus on fixing issues with more capital at their disposal.

We screened our 24/7 Wall St. equity dividend research, looking for companies that, for one reason or another, lowered the dividend and could be ready to explode significantly higher soon, especially when interest rates drop later this year, as many expect.

AT&T

The legacy telecommunications company has been going through a lengthy restructuring, and it lowered the dividend in 2022, which still checks in at 6.30%. AT&T Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services.

Its Communications segment offers wireless voice and data communications services.

AT&T sells through its company-owned stores, agents, and third-party retail stores:

• Handsets
• Wireless data cards
• Wireless computing devices
• Carrying cases
• Hands-free devices

AT&T also provides:

• Data
• Voice
• Security
• Cloud solutions
• Outsourcing
• Managed and professional services
• Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.

In addition, this segment offers broadband fiber and legacy telephony voice communication services to residential customers.

It markets its communications services and products under:

• AT&T
• Cricket
• AT&T PREPAID
• AT&T Fiber

The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.

Brandywine Realty Trust

This top REIT cut its dividend last October to $0.15 from $0.25, which still translates to a gigantic 14.25% paid quarterly. Brandywine Realty Trust Inc. (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States, with a core focus in the Philadelphia and Austin markets.

Organized as a real estate investment trust (REIT), the company owns, develops, leases, and manages an urban, town center, and transit-oriented portfolio comprising 160 properties and 22.6 million square feet as of September 30, 2023, which excludes assets held for sale.

The company has faced challenges from the decline in office real estate due to remote and hybrid work. In addition, rising rates have pressured the company. However, patient investors can add shares now for what could be a huge turnaround when interest rates start to drop.

Intel

This legacy leader in semiconductors has been hammered and cut the dividend by 65%, which now comes in at 1.27%. Intel Corp. (NASDAQ: INTC) designs, manufactures, and sells integrated digital technology platforms worldwide.

It operates through:

• Client Computing Group
• Data Center Group
• Internet of Things Group
• Software and Services
• All Other segment

The company’s platforms are used in various computing applications comprising:

• Notebooks
• 2 1 systems
• Desktops
• Servers
• Tablets
• Smartphones
• Wireless and wired connectivity products
• Wearables
• Retail devices
• Devices for retail, transportation, industrial, buildings, home use, and other market segments

Intel’s portfolio of AI-enabling hardware and software – from CPUs, GPUs, and accelerators to the oneAPI programming model, OpenVINO developer toolkit, and libraries that empower the AI ecosystem – provides competitive, high-performance, open-standards solutions for customers to deploy AI at scale quickly.

Newell Brands

This maker of many brand-name consumer products chopped its dividend by 70% to $0.28 per share, which still is a solid 3.47% payout. Newell Brands Inc. (NYSE: NWL) engages in the design, manufacture, sourcing, and distribution of consumer and commercial products worldwide.

The company operates in five segments:

• Commercial Solutions
• Home Appliances
• Home Solutions
• Learning and Development
• Outdoor and Recreation

The Commercial Solutions segment provides commercial cleaning and maintenance solutions, closet and garage organization products, hygiene systems and material handling solutions, and connected home and security products under the Mapa, Quickie, Rubbermaid, Rubbermaid Commercial Products, and Spontex brands.

The Home Appliances segment offers kitchen appliances under the Calphalon, Crockpot, Mr. Coffee, Oster, and Sunbeam brands.

The Home Solutions segment provides food and home storage; fresh preserving; vacuum sealing; and gourmet cookware, bakeware, cutlery, and home fragrance products under these brands:

• Ball
• Calphalon
• Chesapeake Bay Candle
• FoodSaver
• Rubbermaid
• Sistema
• WoodWick
• Yankee Candle

The Learning and Development segment offers writing instruments, including markers and highlighters, pens, and pencils; art products; activity-based adhesive and cutting products; labeling solutions; and baby gear and infant care products under these brands:

• Aprica
• Baby Jogger
• Dymo
• Elmer’s
• EXPO
• Graco
• Mr. Sketch
• NUK
• Paper Mate
• Parker
• Prismacolor
• Sharpie
• Tigex
• Waterman
• X-Acto

The Outdoor and Recreation segment provides outdoor and outdoor-related products under the Campingaz, Coleman, Contigo, ExOfficio, and Marmot brands.

Walgreens Boots Alliance

This huge drugstore chain is a safe health care play for investors and lowered the dividend in January, which still is a healthy 4.33%. Walgreens Boots Alliance Inc. (NASDAQ: WBA) is a pharmacy-led health and beauty retail company.

It operates through three segments:

• Retail Pharmacy USA
• Retail Pharmacy International
• Pharmaceutical Wholesale

The Retail Pharmacy USA segment sells prescription drugs and various retail products, including health, wellness, beauty, personal care, consumables, and general merchandise, through its retail drugstores.

It also provides specialty pharmacy and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States and six specialty pharmacies.

The Retail Pharmacy International segment sells prescription drugs, health and wellness, beauty, personal care, and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as through boots.com and an integrated mobile application.

This segment operated 4,428 retail stores under the Boots, Benavides, and Ahumada names i:

• United Kingdom
• Thailand
• Norway
• Republic of Ireland
• Netherlands
• Mexico
• Chile

In addition to 550 optical practices, including 165 on a franchise basis.

The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home health care supplies and equipment, as well as provides related services to pharmacies and other health care providers.

 

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