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Dividend Dirty Dogs: Buyer Beware

Published Tue, 30 Jun 2020 12:01:10 -0400 on Seeking Alpha

Seeking AlphaDividend StrategyDividend Dirty Dogs: Buyer BewareJun. 30, 2020 12:01 PM ET|| Includes: APA, BA, BCDRF, BP, BPAQF, CLNY, CLNY.PG, CLNY.PH, CLNY.PI, CLNY.PJ, F, F.PB, GLW, HPE, MPLX, NBL, NLY, NLY.PD, NLY.PF, NLY.PG, NLY.PI, NMR, NRSCF, OKE, SAN, SAN.PB, SLB, WDCby: Risk Research IncRisk Research Inc Quality CompoundersEntry/exit probability analysis for public companies of exceptional qualitySummarySeventy-three public companies yielding over 3% are unable to cover their dividend with free cash flow.
These companies must increase debt, dilute shareholders or draw down liquidity to meet their dividend.
Companies unable to cover their dividend should be avoided by cautious or conservative dividend investors.
The Dividend Dirty Dogs
Risk Research Inc. publishes a list of one hundred dividend-paying stocks that don’t cover their payout with free cash flow, and must thus borrow or dilute shareholders, or draw down liquidity, to cover the shortfall. We report weekly on these companies. Almost all have deteriorating financial statement trends – declining margins and return on assets, increasing debt. Some also have declining liquidity, although this is rarer.
This report focuses on the companies of the group that yield 3% or more. There are 73 of those. They are companies best avoided by cautious or conservative dividend investors.
You might notice that the analysis in this report is concisely stated. There is no, “Company XYZ isn’t doing very well right now, but wait ‘till next quarter (or next year).” A company either covers its dividend or it doesn’t. The rest is all supposition, conjecture. Predictions of the future may be right, may be wrong. That’s not our business. The conjecture market is well-supplied. Risk Research focuses on the territory where fact and probability intersect.
Overall statistics:
Average Dividend Dirty Dog Yield: 9.1% Average Of All Dividend-Paying Companies: 4.3% Average Dirty Dog Dividend... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ANNALY CAPITAL MANAGEMENT 8.60   0.0 -3.32 1.20 14.00
MPLX LP 28.61   12.4 2.30 2.67 9.28
BP 37.67   14.3 2.64 2.44 6.45
FORD MOTOR 9.41   17.1 0.55 0.60 6.37
SCHLUMBERGER 36.90   24.6 1.50 2.00 5.34
BANCO SANTANDER 4.10   8.5 0.48 0.21 5.05
ONEOK 73.93   24.6 3.01 3.56 4.84
APACHE 23.84   0.0 -1.87 1.00 4.22
WESTERN DIGITAL 64.70   0.0 -2.63 2.00 3.21
CORNING 30.25   18.6 1.63 0.80 2.74
BOEING 375.63   44.0 8.54 8.22 2.22
NOBLE ENERGY 24.64   0.0 -1.92 0.48 1.98


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