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Valuentum Dividend Cushion Predicts Exelon's Dividend Cut

publication date: Feb 8, 2013
author/source: Valuentum Analysts

In its fourth-quarter earnings presentation slide deck, Exelon (EXC) announced that it would slash its quarterly dividend payout to $0.31 per share (was $0.525 per share) beginning in the second quarter of 2013 (see image below). Valuentum members were well aware of the risks of the dividend cut long before it became apparent to the market. Our July 2012 dividend report on Exelon revealed a 0.3 Dividend Cushion score, and our October 2012 dividend report revealed a -0.1 Dividend Cushion score. Any Dividend Cushion score below 1 indicates that there is significant risk with respect to the long-term sustainability of a company's dividend.

Our article, Why Dividend Growth Investing Needs to Be Forward Looking, is a must read for income investors. We update our Dividend Reports on firms regularly, and we encourage members to check the Dividend Cushion scores on their income investments at least quarterly (in accordance with our update cycle). We expect to update our dividend report on Exelon soon, incorporating the company's new dividend projections shown below (Image Source: Exelon's 4Q Earnings Presentation).

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