Dividends4Life: Dividend Streaks In Doubt

Dividend Streaks In Doubt

Posted by D4L | Sunday, July 31, 2011 | | 0 comments »

This is the fourth in a monthly series listing companies whose latest dividend increase might be considered “overdue” because these companies have gone more than a year since their previous increase, a possible sign that the dividend (or at least the streak of increases) is in danger. Some firms regularly go more than a year between increases, so this is only an “early warning” sign that some of them may warrant concern.

So which dividends might be in danger? Some companies, such as REITs (Real Estate Investment Trusts) and MLPs (Master Limited Partnerships), have a tendency to pay out much more than earnings per share, simply because of their legal structure, so we can't tell much from seemingly high payout ratios or P/Es in such cases. Some alarming payout ratios and/or P/Es, like those at Harsco (HSC) and Meridian Bioscience (VIVO) may suggest great risk, but a look ahead at the estimated earnings per share for this year and next might provide a bit of comfort. As always, comments and suggestions are welcome below.

Source: Seeking Alpha

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