3 shares at risk of dividend cuts

In the current environment, three companies find themselves in the hot seat due to the potential threat to their dividend payouts. While many investors have emphasized dividend yield as the primary criterion for their decisions, events and the financial performance of these companies suggest that their dividend policies could face challenges.

These developments signal that traditional dividend investment strategies could be under considerable pressure due to current volatility and variability. Investors thus need to adapt to new challenges and should reassess their approach to these three dividend stocks to minimize potential risks and ensure the long-term stability of their portfolios.

Wendy's $WEN-0.4%

Wendy's is an American restaurant chain fast food restaurant chain focusing primarily on hamburgers. It was founded in 1969 and has since grown into a chain of thousands of restaurants throughout the United States and other countries around the world.

Wendy's has recently seen a decline in adjusted earnings per share, an important signal to dividend investors. This decline in earnings indicates potential difficulties that could affect the sustainability of the company's current dividend payments. Another telling indicator is the historical earnings trend, which has not shown significant growth over the past five years, which may raise concerns about the company's future growth and stability.

WEN
$16.70 -$0.07 -0.42%

In recent history, Wendy's has focused on expanding its services and improving its marketing, which could have impact on the company's overall profits. These additional expenditures could affect the funds available for dividend payments and reduce the attractiveness investment for dividend investors.

Cracker Barrel $CBRL+2.8%

Cracker Barrel, known as Cracker Barrel Old Country Store, is an American chain of restaurant chain and convenience stores that specializes in Southern cuisine while offering a variety of souvenirs and home furnishings. It is a combination restaurant and gift shop that offers its customers an authentic Southern experience.

Company Cracker Barrel has paid a dividend of$1.30 per share since 2019, yielding7.9%. This consistency is important to dividend investors, but recent financials raise questions about the sustainability of this payout. In the past year, the company paid out 94% of its cash flow in dividends and more than 116% of its earnings. These figures suggest that the company is paying out dividends at a higher than normal rate, and this may be alarming to investors.

CBRL
$42.14 $1.13 +2.76%

Earlier this year, Cracker Barrel reported its results, which showed a drop in profits from the previous year. The company's earnings per share have fallen since peaking at the beginning of the year 2021which may raise concerns about the future stability of dividend payments. Although the company intends to maintain a high dividend yield, recent developments point to a possible reduction dividend to ensure the sustainability of its financial position.

Hasbro $HAS+2.0%

Hasbro is one of the world's leading manufacturers and distributors of of toys, games and entertainment products. Their portfolio includes a wide range of products for children and adults, including iconic brands such as Monopoly, Transformers, My Little Pony, Play-Doh, Nerf and many more.

HAS
$59.74 $1.16 +1.98%
Fair Price: $67.93
Bzcecy: 17.16%
Undervalued
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The company Hasbro faced several challenges in the past year that left their mark on the earnings report. With a 15% drop in revenue and a net loss of $10.73 per share, it was a year full of challenges. However, despite these difficulties, Hasbro continued to pay a dividend of $0.70 per share, a yield of 5.1%.

HAS
$59.74 $1.16 +1.98%

The recent dividend payment represented up to 160% of earnings of the company, suggesting a possible unsustainability of the current dividend policy. Hasbro has also set a debt reduction target and spent $506 million on this last year. This strategy may affect the resources available for dividend payments and fuel speculation of a possible dividend cut.

Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always conduct a thorough analysis of your own.

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