In today's edition, Austin looks at the three Dow stocks that paid out more to shareholders than they earned over the past five years. Alcoa (NYSE:AA), Bank of America (NYSE:BAC), and Home Depot (NYSE:HD) are three stocks with innocuous dividends, but they actually paid out more than they could afford because of large share repurchases. Granted, these stocks took an outsized earnings hit after the housing bust and these payout ratios would have looked different in another time, but the point remains that dividends and share repurchases, though we love them as investors, can also be unsustainable.
That's why we urge you to read the Fool's brand-new special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free and outlines three of the highest quality dividend stocks you'll ever find. You can click here and read about them today.
Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services recommend Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.