Dividends4Life: 5 High-Yielding Stocks to Avoid

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5 High-Yielding Stocks to Avoid

Posted by D4L | Sunday, February 08, 2015 | | 0 comments »

Whatever your investing style, it’s hard to pass up a juicy dividend. Standard & Poor’s 500-stock index yields a meager 1.9%. And if you’re looking for more income, you can find plenty of dividend peacocks to pick from: Of the more than 9,700 common stocks on the U.S. market, 416 boast yields of 7% or more. Yet, tempting as it may be, it’s often wise to avoid stocks with eye-popping yields. In many cases, yields are high because a stock has fallen out of favor and plunged in price (sending the yield up)

Over the past two decades, 9% of stocks with the highest yields cut or suspended their dividends within a year, according to research from Fidelity. Moreover, shares of companies that suspended or cut their dividends lagged the market by an average of more than 25 percentage points in the 12 months prior to the announced change in dividend policy. Here are five stocks that may be best kept off your shopping list. Share prices and yields are as of January 13. Annaly Capital Management (NLY), Breitburn Energy Partners (BBEP), Cliffs Natural Resources (CLF), Transocean (RIG) and Wynn Resorts (WYNN).

Source: Kiplinger

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