This High-Yield Dividend Stock Might Be in Trouble
Xerox (NYSE: XRX) seems like a cheap dividend stock on the surface. It's a Fortune 500 company that provides print and digital document products and services across 160 countries, its stock trades at just 11 times forward earnings, and it pays a high forward dividend yield of 4.3%.
Xerox hasn't raised its payout since 2017, but it continued paying dividends throughout the pandemic, and spent just 53% of its free cash flow on those payments over the past 12 months. Its low valuation could also make it more appealing as the market rotates from growth to value stocks. Those points are all valid -- but I believe Xerox is still a high-yield trap, for five reasons.
Image source: Xerox.
Source Fool.com
