The market has been quite a mess these last few trading days, but even more so, income investors have had little to show for the record gains in 2019.
Dividend stocks, a place of relative safety for most investors, have had a tough go of it, and if the market has its say, could be in for even more trouble.
Some particularly high profile, widely-held stocks have cut their dividend payouts.
Here are 3 dividend stocks you should avoid altogether.
One of the best all-time dividend stocks going way back has shown signs of cracking under the weight of a drop of its recent stock price.
Currently (T) yields 6.67% and remains a Dividend Aristocrat, but the stocks has returned 12% or slightly more than a T-Bill over the past 5 years.
Over the past year, investors have returned just north of 1%, and making matters worse over the past three years, it has lost money while the broad S&P has returned 50%.
T has been disappointing and there is no evidence that is going to change anytime soon.
PetMed Express (PETS)
Pet retailer, PetMed Express, has Chewy.com nipping at its feet and taking market share away from this darling.
Revenue was flat year-over-year in Q3, which was a big departure from its recent performance. Q4 was no better where sales dropped 4%, even with more ad spends.
Even with its dividend clocking in at 5.5%, the underlying share has too much pressure, especially if this troubling trend continues into 2020.
Earnings haven’t grown, no one wants to drink sugary soda and its recent acquisitions haven’t done enough to diversify away from that problem. This makes KO look overvalued based on it trading at 21x next year’s consensus.
The world is a very different place today, and even with 50 years of dividend increases, healthy is in. KO will most likely remain stale and therefore investors wont continue pumping its share price.