NEW YORK (Reuters) – Some dividend fund managers are wading back into the shares of battered railroad stocks, energy companies and other economically sensitive, cyclical names, even as a host of companies have slashed their payouts.
Cyclical stocks were among the worst-hit S&P 500 sectors in March’s sell-off, with the group .SPLRCD losing as much as 33% from its highs amid fears that a coronavirus-fueled economic slowdown will deal an outsized blow to companies’ businesses.
More than 15 companies in the benchmark S&P 500 – many of them cyclical names – have either suspended or cut their dividends in the last four weeks. On Thursday, Royal Dutch Shell PLC (RDSa.L) cut its payout for the first time since World War Two as part of a plan to save $30 billion to help it weather an unprecedented decline in oil demand.
Yet some managers of divided funds – which seek to give their clients exposure to a steady stream of income – believe the beaten-down sector may hold companies that…
