With interest rates now having spent years near their all-time lows, many investors who might prefer safer assets have moved to dividend stocks as a way to generate income from their investments. The problem with this strategy is that it only works if the companies that have been mailing out those dividend checks can afford to keep doing so.
Therefore, income investors should probably avoid putting their money into any company that is currently experiencing a financial hardship that might threaten its ability to continue making dividend payments.
I started my research by screening the Dividend Champions list by stocks with unsustainable dividend measures. High payouts, high debt, low growth and a cyclic business model are key drivers for an unsustainable dividend.
Each of the attached results grown its dividend over 10 consecutive years.
Here are the results from my research, sorted by highest debt load...
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| These Dividend Champions Could Reduce Its Dividends (click to enlarge) |
