The Motley Fool

Are These 3 Dividends In Danger?

For investors simply relying on the “Summary” page of Google- or Yahoo! Finance for the data used in investing decisions, a high dividend yield can be awfully misleading. Dividend yields are often allowed to reach peer-leading heights by an increasing tolerance for higher payout ratios (i.e. Dividends per Share / Earnings per Share). What should be examined at companies pushing the upper bounds of the payout ratio spectrum is their leverage situation, which will hint at the company’s ability to maintain that high distribution.

Several major energy and materials producers fell under the net of my screen for companies with debt-to-equity ratios higher than 50% in tandem with payout ratios above 75%. For my take on if three of these particular companies have put their dividend and, in turn, your investment income at risk, tune in below.

The Motley Fool’s Special Free Report13 High Yielding Stocks to Buy Today” offers a perfect way to diversify your current dividend stock holdings.  This report is sure to have you rolling in dividend cheques from a variety of sources before you know it!  Simply click here and we’ll send you this report – FREE!

Follow us on Twitter and Facebook for the latest in Foolish investing.

This video was created by Taylor Muckerman, a contributor to Fool.com.

Fool contributor Taylor Muckerman does not own any of the companies mentioned in this post at this time.  The Motley Fool doesn’t own shares in any of the companies mentioned.   

 

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.