Dividends4Life: Death Of PBI's Double-Digit Dividend

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Death Of PBI's Double-Digit Dividend

Posted by D4L | Friday, August 31, 2012 | | 0 comments »

Rest in peace, Pitney Bowes (NYSE: PBI ) double-digit dividend yield. We hardly knew you. Perhaps I'm a little premature in expressing condolences, but it's just a matter of time. Pitney Bowes pays a 10.8% dividend yield now. It won't last. This double-digit dividend yield will die in one of two different ways. Here are the potential paths for the high dividend's demise.

Pitney Bowes operates in a market experiencing secular decline. Buying its stock just for the sky-high dividends is a risky undertaking. If shares continue their multi-year decline, investors could be left in the lurch. Dividend investors can find better opportunities in companies with stronger moats. Health-care REIT Medical Properties Trust (NYSE: MPW ) , for example, owns and leases hospital properties. The company pays a dividend yield of 8%. Utility company Exelon (NYSE: EXC ) offers a lower but still strong yield of 5.5%.

Source: Motley Fool

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