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The Next Dividend to Die?

Mail services provider and former Dividend Aristocrat Pitney Bowes (NYSE: PBI  ) recently sliced its dividend in half. Who might be next? In the video below, Fool contributor Demitrios Kalogeropoulos discusses some of the pitfalls of reaching for high yields, arguing that any yield much above 4% is worth watching closely for signs of an impending cut -- particularly if the company's sales are falling and its payout ratio is climbing.

One such stock is Garmin (NASDAQ: GRMN  ) . The company's GPS equipment sales continue to shrink, but it still plans to pay out $1.80 a share in dividends this year -- exactly four times what it earned in the first quarter.

Demitrios argues that while Garmin's 5% yield may look attractive, there are plenty of better options in the market. For example, you might want to take a closer look at consumer giants McDonald's (NYSE: MCD  ) and Procter & Gamble  (NYSE: PG  ) . 

McDonald's turned in a dismal year in 2012, underperforming the broader market by 25%. Looking ahead, can the Golden Arches reclaim its throne atop the restaurant industry, or will this unsettling trend continue? Our top analyst weighs in on McDonald's future in a recent premium report on the company. Click here now to find out whether a buying opportunity has emerged for this global juggernaut.

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  • Report this Comment On May 10, 2013, at 9:20 AM, Jeffintucson wrote:

    Are you kidding me? The buying opportunity was at 83 a while back. Sorry you missed it.

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Related Tickers

9/27/2016 4:00 PM
GRMN $49.01 Up +0.72 +1.49%
Garmin CAPS Rating: **
MCD $116.88 Up +0.35 +0.30%
McDonald's CAPS Rating: ***
PBI $17.67 Up +0.07 +0.40%
Pitney Bowes CAPS Rating: **
PG $88.36 Up +0.51 +0.58%
Procter and Gamble CAPS Rating: ****