Even when earnings dip, companies like to reward their stockholders so that the stockholders remain loyal to their brand. {Get a Pepsi dividend, buy a Pepsi. Coke ... Coke}}
dividends COULD be reduced in the event of a major stock price drop, but look for those companies that have increased dividends every yr for 15-25+ yrs - decreasing dividends for Blue Chip stocks less likely to happen than smaller companies
The dividend is not directly related to the share price, although the dividend yield is (dividend divided by share price).
As we saw in the last crash, some companies will cease paying dividends if the market crashes and they simply cannot afford to pay them. In general, however, dividend payments are independent of minor fluctuations in the stock market
The dollar-amount of the dividend is fixed, so the only thing that happens if the price drops is that the dividend YIELD increases...
look at yahoo historical dividends, these companies will over time increase dividends
I want to hold blue chip stocks just for their dividends forever. Stocks like Pepsi, P&G, Coke, etc. The dividends return about 2-3% annually.
But what happens to dividends when stocks go down or suddenly the entire stock market crashes? Will these blue chip dividends be affected at all? This is all assuming I hold these stocks forever.
