Dividends4Life: Are The Dow's Top-Yielding Dividend Stocks At Risk?

Dividend Growth Stocks News

It comes as no surprise that stocks that pay dividends are the most sought after stocks by investors. Companies try to maintain dividend payments, but in the process, investors sometimes tend to ignore vital parameters like free cash flow and dividend payout ratios. These parameters define the strength of a company, and the ability to continue paying dividends in the long-term. Discussed below are Dow's (DIA) three highest-paying dividend stocks and whether or not they can maintain high dividend payments: AT&T Inc. (T), Intel Corporation (INTC) and Verizon Communications Inc. (VZ).

All three companies seem to be in a safe position… for now. The real question is for how much longer. For each security discussed there are valid risks, which no investor should ignore. For Verizon, the company's excessive debt may hinder its dividend-paying capability in the future. Intel needs to keep its growing CAPEX in check, but this is not guaranteed to happen as the company transitions to smaller devices. AT&T, while investor friendly, needs to find a balance between cash flow and the amount returned to investors in the form of dividends and stock buybacks. The same goes for VZ, since they both have payout ratios in excess of 170%.

Source: Seeking Alpha

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