A dividend is a distribution of profits to the shareholders. So when you see dividends that are consistently higher than profits, that’s a problem. It may be a sign that the company is recklessly borrowing to maintain its dividend. That’s a major no-no. In evaluating dividend stocks, you want to see consistent and growing profits that can safely support the dividends being promised. You don’t want to bet your retirement on an income stream that could evaporate tomorrow. Today, we’re going to take a look at 10 dangerous dividend stocks. Some of these are OK to wait out if you already hold, but you should avoid if you don’t. Others should be dumped with haste...
I’ll start with a household name, International Business Machines Corp. (NYSE:IBM). Cloud computing would take a wrecking ball to IBM’s business. Up next is Mattel, Inc. (NASDAQ:MAT). Like IBM, Mattel is getting trounced by its competitors these days. Heavy-duty equipment maker Caterpillar Inc. (NYSE:CAT) is up big in the past year. Its revenues peaked in 2012 and have been in decline ever since. I’d also recommend steering clear of that most venerable of dividend stocks, Marlboro maker Altria Group Inc (NYSE:MO). The crown for the highest-yielding stock on this list of dangerous dividend stocks goes to Frontier Communications Corp (NASDAQ:FTR). At current prices, the stock yields nearly 15% … at least for now. CenturyLink Inc (NYSE:CTL) is in the same boat. As a mid-sized phone and internet provider, CenturyLink operates in slow-growth, low-margin businesses. Staples, Inc. (NASDAQ:SPLS) annual revenues peaked in 2012 and have been drifting lower ever since. Kohl’s Corporation (NYSE:KSS) is another brick-and-mortar retailer with a very uncertain future. Pitney Bowes Inc. (NYSE:PBI) is a survivor, given the decline of “snail mail.” And finally, I’d recommend you be very cautious with British telecom giant Vodafone Group Plc (ADR) (NASDAQ:VOD).
Source: InvestorPlace
Related Articles:
- 4 Communications Services Stocks With Increasing Dividends
- 5 Stocks With Room To Grow Their Dividend
- 9 Dividend Stocks Ignoring The 4% Rule
- 10 Stocks That Have Paid Dividends For Over 100 Years
- Love People, Use Dividend Stocks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Having a few trusty dividend stocks that you can approach with a "set it and forget it" mindset takes a lot of the stress out of i...
-
REITs don’t just pay out attractive yields; many of these companies are terrific operators too. So not only do investors get to collect a so...
-
It’s in volatility like this that the value of dividends truly shines through. The market could be having a massive sell-off, but when a com...
-
The company reported solid results for its fourth fiscal quarter. The business development company once again covered its dividend payout wi...
-
If you are interested in high-yield dividend stocks, it’s better to focus on a company’s history of growing its dividend rather than just lo...
-
When it comes to stock investing while in retirement, dividend stocks tend to be some of best investments you can make. Not only do they ten...
-
When the average S&P 500 company pays less than two percent, a 6.5%-yielding stock certainly deserves income investors’ attention. A Top...
-
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Ba...
-
While conventional wisdom holds that you reach for yield, my strategy has been to look first for capital gains, then to management teams tha...
-
There are hundreds of high-yield dividend stocks on the market. At least, that's the case if your definition of high dividend yield isn&...
I'm not crazy about TGT and think it trades lower. After the whole bathroom deal, they've alienated a massive number of customers. I don't trust any management that creates unnecessary drama.