Danger Lurks for These 3 High-Yield Dividend Stocks
Buying dividend stocks is a time-tested way to build wealth, but investors often chase stocks with high yields without doing their homework. High payout ratios -- or the percentage of a company's earnings or free cash flow spent on dividends -- are red flags that indicate a dividend could be cut.
A company's earnings growth could also peak, and a stock's decline could erase any dividend gains. Therefore, let's examine three high-yielding stocks which initially look attractive as income plays but actually conceal hidden dangers: Coca-Cola (NYSE: KO), Qualcomm (NASDAQ: QCOM), and Vector Group (NYSE: VGR).
Image source: Getty Images.
Source: Fool.com
Coca-Cola Co. Stock
€57.50
-0.470%
With 21 Buy predictions and not a single Sell prediction Coca-Cola Co. is an absolute favorite of our community.
As a result the target price of 63 € shows a slightly positive potential of 9.57% compared to the current price of 57.5 € for Coca-Cola Co..
