1 Warning Sign for Dividend Investors

The following video is from this week's Motley Fool Money radio show, with Chris Hill, Ron Gross, James Early, and Joe Magyer. What do Arch Coal, Cross Timbers Royalty Trust Units, Dominion Resources Trust, and Hugoton Royalty Trust have in common? All four cut their dividends in the first half of 2012. Shares of Supervalu plummeted last week after the company delivered bad earnings and announced that it's suspending its dividend. In this segment, the guys analyze the huge challenges Supervalu faces, as well as what it means for investors when a company suspends its dividend. James cites a comprehensive study that found that stocks that cut their dividend delivered a negative return for shareholders, resulting in a big red flag for investors.

Investors looking for dividend-paying stocks trading at bargain prices should check out The Motley Fool's free report "2 Dirt Cheap Stocks With HUGE Dividends." You can get analysis of a market leader in payment systems and a high-yielding energy company by accessing this report. It won't be available forever, so click here -- it's free.

Chris Hill owns no shares of any of the companies mentioned.  The Motley Fool owns shares of Supervalu. Motley Fool newsletter services have recommended buying calls on Supervalu. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1949199, ~/Articles/ArticleHandler.aspx, 4/20/2014 10:38:51 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement