As an income investor, one of my priorities is to satisfy two simultaneous desires: the protection of current income as well as the organic growth of an income stream over time at a rate greater than inflation. To state the obvious, the implication is that I do not want a portfolio stuffed with companies that could cut their dividends after I spend years putting together a nice position in them. When I review the histories of the fallen dividend darlings, there are usually strong signals ahead of time that may warn you that a dividend company is falling apart.
In some ways, a basic look at a company's business model can indicate that a meaningful dividend growth record should prove unsustainable over the long term. Often enough, a company's dividend will cough and wheeze for an extended period of time before the company itself crumbles. A dividend freeze or cut is one of the best "canaries in the coalmine" that can indicate trouble for long-term investors in a particular company. But in the case of companies that do experience long-term earnings trouble, a dividend cut or freeze often precedes the difficulties to come (a notable exception would be collapsing financial companies).
Source: Seeking Alpha
Related Articles:
- Defense Stocks May Not Be Defensive Stocks
- 10 Dividend Stocks That Gave Me A 20%+ Annualized Return
- All Investments Carry Risk
- 9 Stocks Delivering The Dividend Dream
- 10 Quality Dividend Stocks Trading Below Their Fair Value
Warnings From Crumbling Dividend Stocks
Posted by D4L | Saturday, June 08, 2013 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
GameStop (NYSE:GME) lost about 40% of its market value over the past three years, as rising digital downloads and declining mall traffic thr...
-
In a capitalistic society, opportunities to generate (mostly) passive income are all around us. Dividend growth investing is one of the most...
-
Investors buy dividend stocks for a few reasons. For one, they provide income via dividends that act as a bonus on top of capital appreciati...
-
These elite income producers have rallied this year. Their brilliance at producing passive income seems to have caught the market's eye ...
-
If you are looking for reliable dividends, these three Dividend Kings should be right up your alley. Dividends are paid at the discretion of...
-
Buying dividend stocks can be tricky. Oftentimes, stocks that pay exorbitantly high dividends have underlying financial problems, and their ...
-
While optimism in the broader market remains robust – particularly for hyped-up sectors like technology – investors may still want to consid...
-
A strong dividend investing strategy may be to focus on high-quality names that score well on several dividend-related metrics. In other wor...
-
When many investors think about tech stocks, they often think first about high-growth names that come with outsized risk -- not mature, divi...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.