Dividends4Life: 3 Dividend Stocks to Sell Before They Cut Their Payouts

If a company is paying out a substantial portion of its earnings as dividends, it is unlikely to be sustainable in the long term. Firms with high debt levels might need to cut dividends to pay down their debt. These are the risky dividend stocks that might lead to substandard returns. Therefore, investors must beware of the dividend stocks cutting payouts. That said, let’s look at three dividend stocks to sell.

Avoid the drag and avoid these dividend stocks to sell. Its best to cut your losses and avoid these dividend traps. Cato Corp (CATO): Sales and EBITDA growth on a year-over-year basis is at a downtrodden 2.4% and 98.3%, respectively. PetMed Express (PETS): Payout ratio of over 6,000% with a yield of 8% makes it a terrible bet. Big Lots (BIG): It is yielding an alarming 19% while its earnings have taken a major hit.

Source: InvestorPlace

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