Definition of 'Widow-and-Orphan Stock'
Widow-and-Orphan stocks are popular during bear markets because they are generally able to continue their dividend payments during a down turn in the market even if it is for a protracted period.
During bull markets these stocks are often ignored.
The term comes from the fact that widows and orphans need a steady income to house and feed them and for that reason the best investments for them are ones that provide a reliable and steady dividend stream.
Characteristics of a Widow-and-Orphan stock
- strong financial position
- non-cyclical industry
- consistent dividend amount
- consistent dividend payment
- consistent dividend growth
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