‘Coronavirus Pandemic Must Not Impact Companies’ Dividends’

The Coronavirus pandemic has threatened almost every citizen in the United States. People are losing their jobs at an alarmingly high rate. When it comes to Retired Individuals, who have invested in stocks, they should be paid dividends by the companies as part of their ‘moral imperative’ as per Keith Skeoch of Standard Life Aberdeen.

“If there is a moral issue, it is that there is a substantial part of our society that is dependent on retirement income, and dividends, particularly at the time when interest rates are incredibly low, are an important part of that support for retirement income,” Skeoch told CNBC’s “Street Signs Europe.”

He continued his stance by saying that companies that have strong fundamentals and a great balance sheet must make way for dividend payments even in these times.

“There is this balance between the economic impact and our stewardship obligations, so I think for those that can, there is a moral responsibility to pay,” he said

All over the world, the earrings of the corporate sector have taken massive tumbles as they record massive losses. Resultantly, these companies are reluctant to cut their dividends to ensure survival.

Companies that were previously in a good position were destined to pay off dividends but the pandemic has taken the global economy by the storm especially in the US as it has the most number of infected individuals.

AJ Bell Director of Investment Russ Mould wrote on Wednesday, “Of the top 10 payers by actual size of distribution, Shell and BP have both offered trading statements which have emphasized how cuts to capital investment, cost reductions, asset disposals, and fresh debt would provide ample liquidity,

“Shell suspended its buyback program but neither firm even mentioned the dividends, to suggest Shell and BP seem determined to defend their planned payments.”

World Health Organisation has been guiding the nations to tackle the Pandemic that is having a negative impact on the world economy. There is no doubt that companies are cutting costs due to major production halt. But will these factors impact the dividend payments remains to be seen.