e.g. I bought C four years ago and was good dividend growth stock. I received dividends for four years. When it cut the dividend, the total price was below my cost basis. Does it make sense to sell at loss after four years? Every company will struggle at some point in time! That’s when I look at value preposition and decide next step. Consider the case for BAC, C, and GE. I believe BAC has value preposition and hence, bought few more and moved it to value portfolio. C was sold and did not deserve a place in either of the two portfolios. I have held GE for last 6 six years. So far it has met dividend growth requirement. But its capital value has been going down. It has now frozen the dividend until 2009, and future dividend growth can be questioned (very high debt – they will need more cash flow to service it). So although GE may not be dividend growth sock, it may be a value play.

Nice discussion here and good to read the diverse viewpoints.

Of course there are exceptions to the rule and most probably BAC will emerge from this mess. The issue however is that the company issued so much more common and prefferred stock that obtaining the dividend achiever status would be harder than before..

As for exceptions, I would say con EDison and electric utility in US, cut their dividends in 1970′s only to achieve a very good total returns and a dividend aristocrat status for over 3 decades now..

But as a rule large cap stocks that cut their dividends are not very nice to own.. GM is one example that comes to mind.. Bethlehem Steel is another example from the 1980′s…