A 3-Step Test for Avoiding Dividend Disasters

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I keep saying it because it’s true and critical to your retirement wellbeing  (or lack thereof)  – don’t take any dividends for granted today!

In a minute I’ll outline a 3-step “dividend disaster” test that you can quickly run on the stocks you own. I want to make sure you don’t hold the next Mattel (MAT) simply because “its yield looked good” or “so-and-so guru recommended it.”

First-level income hounds piled into Barbie’s plastic 6% yield. But when the firm “surprisingly” announced a sharp 61% dividend cut two weeks ago, shares completed a 36% dive:

6 Years of Dividends, Gone

Our Contrarian Income Report portfolio was, yet again, unique in our handling of this ticking toy bomb.…
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A high dividend yield can be the ultimate retirement holding. Or it can be a trap.

Today, I’m going to show you five stocks with mouth-watering yields of between 6% and 23% that are tomorrow’s dividend disasters. If you own shares in any of these firms, sell them now.

Don’t “ride these stocks down” like RadioShack shareholders did when the nearly century-old former electronics retailing giant that filed for bankruptcy protection in 2015.

RadioShack suspended its dividend in July 2012. The warning signs were there, but no one listened. Revenues had been in constant decline since their peak 16 years earlier, debts were mounting, ratings agencies were downgrading RadioShack’s bonds. And in April 2012, RSH reported the first of what would be many quarterly losses.


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About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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