Steer Clear Of {avoid_company} With {hold_companies_count} Better Dividend Stock Options
When it comes to investing for reliable income, dividend stocks are a popular choice among investors. However, it is important to assess whether a high dividend yield is sustainable based on the company’s financial health. A high payout ratio can indicate that a company is paying out more to shareholders than it can afford, which may impact future dividends. This article will discuss a cautionary example of an unsustainable payout ratio and compare it with more stable dividend-paying options.
Top 10 Dividend Stocks:
1. Allianz (XTRA:ALV) – 5.31% Dividend Yield
2. Yamato Kogyo (TSE:5444) – 3.68% Dividend Yield
3. Business Brain Showa-Ota (TSE:9658) – 3.59% Dividend Yield
4. Ping An Bank (SZSE:000001) – 7.01% Dividend Yield
5. FALCO HOLDINGS (TSE:4671) – 6.52% Dividend Yield
6. Kwong Lung Enterprise (TPEX:8916) – 5.62% Dividend Yield
7. Kurimoto Ltd (TSE:5602) – 5.15% Dividend Yield
8. Banque Cantonale Vaudoise (SWX:BCVN) – 4.49% Dividend Yield
9. James Latham (AIM:LTHM) – 6.30% Dividend Yield
10. Gakkyusha Ltd (TSE:9769) – 4.05% Dividend Yield
One company to be cautious of is Nanjing TDH Technology Ltd (SZSE:301378), which specializes in judicial information systems and IT services in China. With a dividend yield of 1.8% and a high payout ratio of 119.2%, the company may face sustainability issues. Recent financial reports show a shift from net income to a net loss, raising concerns about the reliability of future dividends.
On the other hand, PT Samudera Indonesia Tbk (IDX:SMDR) offers a high dividend yield of 9.35% with a low payout ratio of 0.9%. Despite fluctuations in dividends over the past decade, the company’s earnings are sufficient to cover dividend payments. However, a drop in net income raises potential profitability concerns.
Investors should carefully analyze dividend stocks to ensure sustainability and reliability. It is essential to consider the company’s financial health and payout ratio before making investment decisions.