Dividends4Life: 3 Dividend Stocks Retirees Should Avoid

3 Dividend Stocks Retirees Should Avoid

Posted by D4L | Thursday, July 09, 2015 | | 0 comments »

Most investors can't deny the appeal of a solid dividend stock, but retirees have a particular affinity for them. And that's for good reason. Dividend stocks tend to be more stable and reliable, and also provide actual income, which is a crucial consideration when investing in retirement. However, not every dividend stock is a good fit for retirees. In fact, our contributors believe investors should avoid Vector Group (NYSE: VGR), Cal-Maine Foods (NASDAQ: CALM), and McDonald's (NYSE: MCD) in their retirement period.

Vector Group’s payout is simply unsustainable. Over the past twelve months, Vector has paid out $182 million in dividends. Cal-Maine differs from most companies in that rather than committing to a set quarterly dividend payment, the egg producer ties its payout each quarter to its earnings level under generally accepted accounting principles, with investors receiving one-third of GAAP earnings. McDonald's has a solid trajectory of dividend growth, with 38 consecutive years of consistent payout increases under its belt. However, I would still stay away from the fast-food giant until -- or unless -- management proves that it can reverse the decline in sales.

Source: Motley Fool

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