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Oil prices collapse

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Is It Over for Dividend Investors in the Energy Sector?

Aaron Levitt Oct 08, 2020

It’s no secret that the energy sector has been suffering for some time now. The combination of lower demand and high production has just eviscerated prices for crude oil and natural gas. And because of those profits, revenues and cash flows for many stocks within the sector have dropped to unhealthy levels. But despite the decline, the large, integrated energy giants are steadfast. Thanks to their diversified business model, their cash flows and dividends were as “good as gold.”

But not anymore.

As the oil price collapse continues to dig deep, even the oil majors are now suffering. The worst part is the current collapse in oil prices could be long lasting as consumers and businesses change their habits. For dividend investors, this could mean that the sector is no longer viable for safe and stable income.

Find more about energy stocks, ETFs and mutual funds here.

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