5 Dividend Stocks Not To Buy
0.00%June 30 | MyPlanIQ portfolio symbol P_36943
As the focus on dividend stocks remains, there may be a concern as to
whether there is a dividend bubble being created. Matt Koppenheffer of
the Motley Fool sets out to address this issue. He claims there is no dividend bubble.
He found that on average dividend stocks in the S&P 500 currently
have a higher yield, a lower valuation, and a lower payout ratio than
they've had over the past 10 years. He concludes that while there may be
individual stocks that are over priced, this is not generally true.
On the back of this, Matt goes on to select five dividend stocks to buy and five to avoid.
Here are those who have high valuations and high (unsustainable?) payout ratios.
Company | Dividend Yield | Enterprise Value / Operating Income | Payout Ratio |
|---|---|---|---|
| Southern Company (SO) | 4.3% | 14.0 | 72.7% |
| ONEOK (OKS) | 3.0% | 12.3 | 63.0% |
| Plum Creek Timber (PCL) | 4.3% | 26.8 | 140.9% |
| Kimco Realty (KIM) | 4.1% | 28.5 | 267.4% |
| Ventas (VTR) | 4.4% | 41.0 | 143.0% |
These companies are in energy (Southern, ONEOK) and real estate which is much more focused.