Dividend stocks, hot this year, may get even hotter thanks to the Federal Reserve

Dividend stocks, which have performed well this year, may get another boost if the Federal Reserve cuts interest rates.

Investors have already anticipated rate cuts by pushing yields on U.S. Treasury paper lower across the board, and we now have an inverse yield curve, with yields on three- and TMUBMUSD03M, -0.01% six-month Treasury bills TMUBMUSD06M, +0.35% higher than the yield on 10-year notes TMUBMUSD10Y, +1.55% European Central Bank President Mario Draghi added fuel to the fire Tuesday, saying eurozone economic indicators were “tilted to the downside” and that “additional stimulus will be required” if the numbers don’t improve.

It is remarkable to see a 22% increase for the real-estate sector in 2019, excluding dividends, even after it outperformed, slightly, the full S&P 500 in 2018. One way to estimate a company’s ability to maintain or raise its dividend is to compare its free cash flow yield to its dividend yield. Free cash flow is remaining cash flow after planned capital expenditures. This is money that can be used to raise dividend payments, repurchase shares, make acquisitions, expand organically or for other corporate purposes. If the free cash flow yield is lower than the dividend yield, it isn’t a very good sign.

Here are the 10 with the highest dividend yields that also haven’t cut their regular dividend payments over the past five years , according to data provided by FactSet:

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