Overvalued Dividend Stocks Primed To Fall If The Market Corrects Downward

When the market starts looking ready to make a strong correction one of the best things an investor can do is review their positions to make sure their investments aren't on what I call the Dividend Hit List. The Dividend Hit List is a list of dividend stocks that have outperformed the S&P 500 year-to-date and also hold a higher P/E valuation than the market but are operating with weak fundamentals. I believe the stocks listed below are overvalued and will likely sell off aggressively should the market enter a correction phase.

These stocks were identified by screening for dividend stocks that have outperformed the S&P 500 YTD, have a higher PE valuation than the S&P 500, and who have posted negative EPS growth over the last year while operating with a current ratio of less than 1: Dominion Resources, Inc. (D), NextEra Energy, Inc. (NEE), Carnival Corporation (CCL) and Williams Companies, Inc. (WMB). I hope this short list of dividend stocks helps as investors evaluate and re-balance their portfolios for 2014.

Source: Seeking Alpha

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