A company with a payout ratio over 100% is paying out more in dividends than it is making in profits, a long-term unsustainable situation. For example, a company with a payout ratio of 50% is making double in income what it is paying out in dividends, so it has ‘room’ for earnin...
Given the descriptions above, the Dogs of the Dow are clearly a very diverse group of blue-chip stocks that each enjoy significant competitive advantages and lengthy histories of paying rising dividends. As a result, this investing strategy is a great, low-risk way for unsophisticated investors ...
Mortgage REITs face risks from changing interest rates, borrowers prepaying or refinancing their loans, borrowers defaulting on loans, and so on. As tempting as AGNC Investment might seem, a closer look reveals that its payouts and stock price have been falling. In short, the company is not ...
In practice, this typically occurs if a company has a high level of debt and wants to focus on debt reduction. But it could in theory happen to any dividend paying stock. The risks of high yield investing can be reduced (but not eliminated) by investing in higher quality businesses in a...