The CAPS Screen: Don’t Touch These 5 Dividend Time Bombs
By
Ilan Moscovitz (TMF Diogenes)
June 10, 2008
|
The collective wisdom of the Motley Fool CAPS investment community produced for me these five dividend dynamos.
As I have cautioned before, even though most of the stock market's gains come from dividends, high yields aren't all gumdrops and rainbows. Shareholders of dividend-cutters Ford (NYSE: F) and Marsh & McLennan (NYSE: MMC) know that it’s also important to make sure a company is healthy enough to support a large dividend if one is to avoid the next dividend implosion.
With that in mind, our new CAPS screening tool showed me some high dividend payers it might be best to avoid. The five companies below offer dividend yields above 3%.
They also have:
- Market caps greater than $5 billion.
- One- or two-star ratings from our CAPS community.
Remember, in the first year for which we have data, one-star companies flamed out with an average loss of 17%. Two-star companies also underperformed.
|
Company
|
Share
Price
|
Sector
|
Market Cap
(in billions)
|
|
Citigroup (NYSE: C)
|
$19.60
|
Financial
|
$102.9
|
|
Harley-Davidson (NYSE: HOG)
|
$38.99
|
Consumer Goods
|
$9.2
|
|
Home Depot (NYSE: HD)
|
$26.54
|
Services
|
$44.6
|
|
JPMorgan Chase (NYSE: JPM)
|
$37.51
|
Financial
|
$128.5
|
|
Qwest Communications (NYSE: Q)
|
$4.52
|
Technology
|
$7.9
|
Data from Motley Fool CAPS and Yahoo! Finance as of June 9.
Are these dividend duds? Or are they simply misunderstood? Come and join us on Motley Fool CAPS to let us know what you think. Our 105,000-strong (and counting) CAPS community wants your opinion.
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