In every industry there are companies which are debt free and they have greater opportunities when markets go down. We have seen stock markets loose all the value they gained while the President was in office. It is almost like people woke up from a bad dream, however being debt free and having interest rates near 0%, mean there are companies that when the coronavirus is seemingly over, they can do acquisitions. Just because there are bargains does not mean every merger will work, but if there are valid reasons mergers can work well. This means doing your homework to see which companies can be acquired and equally what companies will be doing the acquiring.
Linking to dividend paying stocks, for quality companies there are always many more opportunities than there are management abilities to acquire companies. As you examine your investments, see how disciplined they are in past acquisitions. How did it work out? where they buying for growth or to run in the same spot? is the industry growing or stabilizing? will customers pay higher prices? What is the debt load?
There are more questions than answers, till the next time – to raising questions.