2 interesting stocks with a giant dividend above 10%
A high dividend is understandably tempting. But it is important to beware of some of the pitfalls and risks that can be found in such stocks. Can you find any skeletons in the closet with these two companies?
Understandably, the biggest risk to watch out for with a high dividend is the dividend trap.
A dividend trap occurs when a company provides a high dividend, but one that is not sustainable by its actual business performance. Dividends exceed operating profits or cash flow, and debt or asset sales are used to pay them. Investors are attracted by the high dividend yield, but low business growth signals that dividends may not be sustainable in the longer term. It is therefore possible that they will be reduced or stopped altogether, even if they initially offer a high income. A dividend trap means that dividends do not reflect the true strength of the business, earnings and cash flow of the company. Therefore, an investor…
ABR is newly included in the S&P SmallCap 600
Nice stock, thanks. I didn't know either one. I have a $O competitor as you suggest in the article and I'm happy there. I have a $WPC that makes me less happy already. Anyway, I saved that one and we'll see how the future plays out, as you write, it's not a slam dunk for the sector yet and until the Fed turns around and raises rates, it's going to be tough for them and prices could be even lower. I have been overbought this $O within a certain DCA and now I will wait. In the future I like the first one mentioned in your article better, the second one has office buildings as well and I don't think everyone is coming back from homeoffice there.
Stocks are great, but what do you think about the real estate market? It wasn't that long ago that there were scares about the problems there and now nobody is really addressing it. Are you still investing or are you staying away from them?
Dividends are really great. It's just a pity that my portfolio is already full...