6 Dividend Stocks that are Sustainable Twice Over

You don't always have to choose between a financially sustainable and an environmentally sustainable stock

Sunniva Kolostyak 18 June, 2021 | 6:51PM
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Sustainability usually means two things in the investment world – and it can sometimes be confusing to figure out whether it means a stock that is performing well or one that’s doing right by the planet. And unfortunately, the two do not always go hand in hand.

A financially sustainable stock could be defined as one that is consistently providing a dependable dividend - particularly important to income investors seeking reliable payouts. However, such stocks have had a hard time in the past year with many firms forced to slash their payouts last year. That's why investors must be selective, says Dan Lefkovitz, a strategist for Morningstar's Indexes group. “Looking for the most yield-rich areas of the market can often lead you into troubled areas and dividend traps – companies may have a nice-looking yield, which is ultimately unsustainable. You have to really screen for dividend durability, sustainability going forward,” he explains.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Ferguson PLC10,090.00 GBP0.00Rating
Pearson PLC869.40 GBP0.00Rating
Reckitt Benckiser Group PLC5,523.00 GBP0.00Rating
RELX PLC2,114.00 GBP0.00Rating
Schroders PLC3,657.00 GBP0.00Rating
Unilever PLC4,151.00 GBP0.00Rating

About Author

Sunniva Kolostyak  is data journalist for Morningstar.co.uk

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