Dividends4Life: 3 Risky Dividend Stocks You Must Sell Now

3 Risky Dividend Stocks You Must Sell Now

Posted by D4L | Thursday, April 13, 2017 | | 0 comments »

Because there’s a new threat on the horizon: rising interest rates—and first-level investors are ignoring how much they’ll squeeze debt-laden sacred cows, including many Dividend Aristocrats. Throw in the S&P 500’s nosebleed price-to-earnings ratio of 25, and you’ve got a recipe for some harsh share-price drops when the next cuts come, and I don’t want you to get hit. That’s why I’ve flagged three blue chips you must avoid now (or dump if you already own them)...

Pitney Bowes (PBI) has two things going for it: a well-known name and a high 6.0% forward dividend yield. But don’t be fooled—that yield isn’t because the quarterly dividend is rising (it hasn’t moved since April 2013, when it was slashed by 50%). It’s because Pitney’s share price has cratered from $28.18 in July 2014 to just around $12.70 now. Like Pitney, L Brands (LB), owner of the Victoria’s Secret and Bath & Bodyworks chains, looks like a tempting play—at first. Its yield has popped from 4.1% to over 5% in the last month, and its P/E ratio is now a tantalizing 12.0, a place it hasn’t been since 2009. Mosaic Co. (MOS): Fate finally caught up with the fertilizer maker after I flagged it as a prime candidate for a dividend cut in November. Mosaic shareholders who held on in hopes of escaping a similar disaster paid dearly: on February 7, management chopped the dividend by 45%, from $1.10 annually to $0.60.

Source: Forbes

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