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These are our most recent articles. Also see which stocks have been this week’s best and worst performers.
Dividend Aristocrat Cardinal Health (CAH) Drops 12% – Buying Opportunity or Value Trap?
Cardinal Health (CAH) updated its guidance Tuesday morning, causing its stock price to plunge nearly 12% on the day. The company previously cut its profit guidance in October 2016, but today's news was clearly still a big surprise. Many investors like owning dividend aristocrats such as Cardinal Heath because they have been less volatile than the broader market (learn about all 51 dividend aristocrats here). Let's take a closer look at why the market was so disappointed with Cardinal Health's business update and if the stock could be an attractive investment opportunity for our Top 20 Dividend Stocks portfolio. How does Cardinal Health make money? Founded in 1971, Cardinal Health is one of the largest healthcare [...]
“What Should I Do if Another Verizon Happens?”
One of our members emailed me after reading through my recent Verizon article, which analyzed the scary-looking drop in free cash flow that the company reported. Many investors worried that the company's dividend could be at risk. I dug through Verizon's financial statements to show why I believe Verizon's dividend remains safe and why the lower free cash flow appears to be noise rather than a reason to head for the hills. After reading the article, our member asked me the following question: "If I see apparently-cautionary stats like a spike in the payout ratio, and a sudden decline in free cash flow per share, but the Dividend Safety Score is high, do I ignore my instincts to avoid the stock, [...]
Seagate Technology (STX): High Yield Dividend Income or Value Trap?
Many of the most popular high yield stocks are real estate investment trusts (REITs), master limited partnership (MLPs), and business development companies (BDCs). All of these industries are designed to pay very high dividends. When it comes to regular corporations, however, a very high dividend yield can be a warning sign that something is fundamentally flawed with the company’s business model. Many of these companies tend to have relatively low Dividend Safety Scores, indicating that their dividends could be at risk of being cut in the future. Let’s take a closer look at Seagate Technology (STX), which offers a high dividend yield above 5% and has paid higher dividends for six straight years, to see if the [...]
Clearing the Air on Verizon’s Dividend Safety
A number of readers have emailed me in recent weeks wondering about Verizon’s (VZ) dividend safety. Their anxiety developed after reading several articles online that suggested Verizon’s dividend was no longer sustainable because the company’s free cash flow did not cover it last year. However, Verizon scores a 93 using our Dividend Safety Scores, indicating that its payout remains very secure. I believe Verizon is one of the best high dividend stocks for current income, so I was interested to review what all of the fuss was about. I will do my best to walk through Verizon’s financial statements (grab some coffee now to stay awake) and objectively review the company’s dividend safety. Let’s start [...]