Dividends4Life: High-Yield Dividend Stocks to Avoid

High-Yield Dividend Stocks to Avoid

Posted by D4L | Wednesday, October 24, 2012 | | 0 comments »

High yield dividend stocks can appear to be attractive investments, but many of them can be very risky. Some may seem to be a good investment at one point in time, but it is important to understand that factors for these seemingly high-yielding stocks, such as the size of the dividend, stock price, and dividend yield can change at any time. The biggest risk factor with high yielding dividend stocks is a continually falling stock price. Often times, a super-high yield results mainly from a price drop, since a stock’s price and yield move inversely to each other.

Also, if a stock price falls significantly in a relatively short amount of time, a company may decide to cut their dividends. Remember, falling stock prices are often a signal of declining earnings, and when earnings drop, dividends tend to follow. Below are five high-yield stocks that investors should probably avoid right now: 1. BGC Partners, 2. Tsakos Energy Navigation, 3. Portugal Telecom, 4. Teekay Tankers and 5. France Telecom.

Source: Dividend.com

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