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).