DEFINITION of 'Widow-And-Orphan Stock'

A stock that pays high dividends and is generally considered to carry low risk. Widow-and-orphan stocks would most likely be in non-cyclical industries that are less likely to be negatively impacted during economic downturns.

BREAKING DOWN 'Widow-And-Orphan Stock'

Prior to being broken up in 1984, AT&T was considered to be a widow-and-orphan stock, and was widely held by all classes of investors. Some utilities are deemed to be safer than the broader market. Investors seeking higher returns may shy away from widow-and-orphan stocks because they provide low returns, regardless of the company size.

RELATED TERMS
  1. Value Stock

    A stock that tends to trade at a lower price relative to it's ...
  2. Defensive Stock

    A stock that provides a constant dividend and stable earnings ...
  3. Stock Dividend

    A dividend payment made in the form of additional shares, rather ...
  4. Indicated Yield

    The dividend yield that a share of stock would return based on ...
  5. Prior Preferred Stock

    A type of preferred stock with a higher claim on assets and dividends ...
  6. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
Related Articles
  1. Small Business

    Do "Widow And Orphan" Stocks Still Exist?

    Is there such a thing as a safe stock providing high dividend income? It may be time to redefine the terms "widows" and "orphans."
  2. Insights

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  3. Investing

    The Alphabet Soup Of Stocks

    Are the countless stock categories leaving you puzzled? Here we help you sort through the confusion.
  4. Investing

    Best Places to Find High-Dividend Yield Stocks

    Learn about the advantages of stocks with good dividend yields, such as income, stocks in defensive sectors and strong-performing companies.
  5. Investing

    Stock Ratings: The Good, The Bad And The Ugly

    Stock ratings are both loved and reviled. Find out why they deserve equal measures of both.
  6. Insights

    What's a Cyclical Industry?

    A cyclical industry is correlated to the business cycle.
  7. Investing

    The 3 Biggest Misconceptions of Dividend Stocks

    To find the best dividend stocks, focus on total return, not yield.
  8. Financial Advisor

    Advising FAs: How To Explaining Stocks to a Client

    Without a doubt, common stocks are one of the greatest tools ever invented for building wealth.
  9. Financial Advisor

    Are Dividend Stocks a Good Substitute for Bonds?

    Are dividend paying stocks a good substitute for bonds in a low interest rate environment?
  10. Investing

    Dividend Yield For The Downturn

    High-dividend stocks make excellent bear market investments, but the payouts aren't a sure thing.
RELATED FAQS
  1. What does it mean when utility companies are called widow-and-orphan stocks?

    Learn what is referred to by the phrase "widow-and-orphan stocks," as applied to utility companies, and the appeal of utilities ... Read Answer >>
  2. What is the long-term outlook of the utilities sector?

    Discover the long-term outlook for the utilities sector, along with the various aspects that make utility stocks appealing ... Read Answer >>
  3. What is the difference between cyclical and non-cyclical stocks?

    Understand the difference between cyclical stocks and non-cyclical stocks. Learn about the underlying demand factors of each ... Read Answer >>
  4. Why have utility stocks become more volatile investments than they were historically?

    Examine the current state of the utilities sector, and learn why analysts are forecasting uncharacteristic levels of volatility ... Read Answer >>
  5. What is the average annual dividend yield of companies in the utilities sector?

    Learn about the average annual dividend yield of companies in the utilities sector and the overall suitability of the sector ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center