Login | September 29, 2026
Do dividends shrink?
Motley Fool
Published: September 29, 2026
Q. Do companies ever reduce their dividends? -- D.B., Henderson, Nevada
A. They sure do -- but they try very hard not to, because a dividend cut is a sign that they're struggling financially. A cut will disappoint shareholders and may also end a long streak of annual increases. Before reducing, suspending or even eliminating their dividend, companies will generally seek other ways to cut costs or boost revenue.
One company that recently cut its dividend is the food giant Conagra (home to brands such as Birds Eye, Slim Jim and Marie Callender's). In mid-July, it slashed its payout by 50%. Conagra is carrying a lot of debt, and growth has been elusive.
More recently, Canadian telecommunications company Telus cut its dividend by about 55%, in part to help pay down its debt. The company, under a new CEO, is looking to transform its operations.
A dividend reduction is certainly a red flag for investors, but it's not necessarily a deal-breaker. Plenty of successful companies have cut or eliminated their dividends only to reinstate or increase them later. If you're interested in a company that cut its payout, research it to see whether you have confidence in an upcoming turnaround. If not, avoid it for now and wait and see.
Q. What are "equities"? -- S.T., Reston, Virginia
A. When you see the word "equities" bandied about in the financial world, it generally just means "stocks." There is a technical difference between equities and stocks: The term "equity" refers to ownership, or the value of any asset you own, such as stocks -- or your home -- once any liabilities are subtracted. In general, though, "equities" is usually simply a fancy way of saying "stocks."
Fool's School
Beware of Cold Calls and Texts
Cold calls have been a menace for decades, and now many of us receive cold texts or emails, too. All are unsolicited communications from strangers, urging us to take some action -- most often financial ones, perhaps involving stocks or cryptocurrencies. It's often best to just ignore these, hanging up and/or blocking them, but if you're tempted in any way, remember these red flags:
-- Low risk, high reward: If you're being promised big financial gains with little risk, that's a case of something being too good to be true. If it was such a great deal, no one would be trying to push it on anyone else. If you're being offered "insider" tips, know that it's against the law to spread or act on true insider information.
-- Aggressiveness or urgency: If you're being pushed hard to act now, that's a bad sign. Some cold callers may even try to scare you into action, perhaps by threatening to put a lien on your property or to notify some authority about an alleged issue. It's generally best to take your time thinking through financial decisions; don't let a stranger push you to act.
-- Colorful language: Don't fall for it if you're told you've been "specially selected" or are among some "lucky few" to have a "once-in-a-lifetime" opportunity. Other red flags include "guaranteed," "sure thing," "can't lose" and "is going to triple in value!"
If you receive a cold call, tell the caller to put you on their "do not call" list. If you take names and notes during the call, you can report anything shady to the Securities and Exchange Commission (SEC) and other agencies. Visit SEC.gov/investor/pubs/coldcall.htm for an overview of what cold-callers should and shouldn't do, and where you can report offenders. You can also get on the National Do Not Call Registry by visiting DoNotCall.gov or calling 1-888-382-1222.
When seeking possible investments, stick to trusted sources and avoid any that come to you unsolicited from strangers. They may well be scams that can cost you a lot.
My Smartest Investment
What Can Be Achieved in 40 Years
I read in your newspaper feature about someone who started investing early and retired a millionaire. I did the same thing, socking money away for more than 40 years. It was a bit rough in the early years, but it was worth it. My nest egg is now in the seven figures, and I can buy, do or go to anything. Fortunately, I already did all that I wanted through my profession. I have no urge to explore the world now or to buy expensive things I don't really need. My daughter has just entered the workforce. Next year, I'll show her what I did, so she can decide what path she wants to follow for the next 40-plus years. -- C.C., via email
The Fool responds: Many of us don't have 40 years of investing left, but quite a few of us do. Even those in their 40s could live another 40 or 50 (or more) years, keeping some portion of their long-term money in stocks. If we can get young people we care about started in investing in their 20s or 30s, we can really set them up for a comfortable future. And it can all be as simple as regularly adding money to one or more low-fee, broad-market index funds, such as an S&P 500 index fund, for decades.
(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@fool.com.)
Foolish Trivia
Name That Company
I trace my roots back to 1929, when two circus performers who'd lost their jobs at the outset of the Great Depression started collecting old rags discarded by factories, washing them and selling them back. By 1938, I was called Acme Wiper and Industrial Laundry. (I have a different name now.) I expanded into uniform rentals in 1959, which nearly doubled my revenue. My catalog debuted in 1991. In 2001, I was added to the S&P 500 index. I serve over 1 million businesses, employ around 48,000 people and rake in around $11 billion annually. Who am I?
Last Week's Trivia Answer
I trace my roots back to 1902, when two fellows launched a linseed-crushing business in Minneapolis to produce oil for industrial applications such as paints and adhesives. I formed a grain division in 1927, and I started crushing soybeans in 1929. My barge-freight business debuted in 1967 and my trucking division in 1979. Today, based in Chicago and with a recent market value of $37 billion, I'm a top provider of human and animal nutrition, offering food and beverage ingredients; offerings for livestock, equine and pet needs; and more. I boast 450 crop procurement locations and 330-plus manufacturing facilities. Who am I? (Answer: Archer-Daniels-Midland)
The Motley Fool Take
Seeking Undervalued Stocks?
It's often tempting to chase high-flying stocks. But they can be vulnerable to sharp drops when the stock market swoons. If you're worried about a possible market pullback or economic recession, parking money in a solid exchange-traded fund (ETF) may help you sleep better. (An ETF is a fund that trades like a stock.) One way to take on less risk -- while still expecting respectable returns over the long term -- might be the Vanguard Morningstar Value ETF (NYSEMKT: VTV).
This ETF tracks the CRSP US Large Cap Value Index, which assesses factors such as price-to-book and price-to-sales ratios to determine which stocks seem undervalued. Vanguard is known for low fees, and this ETF's tiny expense ratio (annual fee) of 0.03% means you'll pay just $3 annually for every $10,000 you have invested in it.
Over the past five and 10 years, this ETF has averaged annual gains of around 12.5%. It's also a respectable dividend payer, recently sporting a dividend yield of 1.9%. The fund's "beta" of 0.69, meanwhile, reflects low volatility: If the overall market dropped by 10%, this fund might drop by only 6.9%.
The ETF holds more than 300 stocks, including Micron Technology, JPMorgan Chase, Johnson & Johnson, ExxonMobil and Walmart. (The Motley Fool owns shares of and recommends the Vanguard Morningstar Value ETF.)
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