A Dozen Stocks Whose Dividends Could Go Up In Smoke

When you look for a dividend stock, the yield is often the first thing that gets your attention. If not the yield, at least the performance may create the appearance of a very healthy and profitable company.

However, a high yield does not necessarily translate into an attractive holding. Many of these dividend stocks come with bigger caveats you need to keep in mind. Companies can choose to cut their dividends or discontinue them on a whim, especially if their earnings are no longer enough to cover the dividends.

There is a growing list of stocks whose dividend yields look temptingly high … until you trace the trajectory of the underlying business and realize the only thing keeping the payment alive is a dwindling cash reserve and management’s hope that conditions improve before the next board meeting.

Here are a dozen such stocks whose dividends may disappear, partially, or even entirely. These companies may recover their earnings in the future, but their current payout ratios look precarious. A payout ratio above 100% means their dividend payments have exceeded their earnings.

#12 Banco Santander (Brasil) SA (BSBR)

This Brazilian bank has a market cap of $49.123 billion. Shares are currently trading at $6.45 (up 4.46% YTD). The stock’s forward dividend yield is 5.07%, but the dividend payout ratio is 115.81%.

#11 Vail Resorts Inc. (MTN)

This travel and leisure company has a dividend payout ratio of 127.77%. Shares are $134.01 and the stock is up 0.91% YTD. Vail’s market cap is $4.818 billion and the forward dividend yield is 6.54%.

#10 Select Water Solutions (WTTR)

This $1.7 billion oil and gas company has a dividend payout ratio of 133.33% and a forward dividend yield of 2.05%. WTTR at $13.67 per share is up nearly 30% year to date.

#9 Golar LNG Ltd. (GLNG)

Golar is a global liquefied natural gas company with a market cap of $4.692 billion. GLNG stock is at $45.83 (up over 23% YTD). The forward dividend yield is 2.25% and the dividend payout ratio is 154.24%.

#8 Olin Corp. (OLN)

Chemical company Olin’s market cap is $2.836 billion. The stock’s dividend payout ratio is 173.91%; the forward dividend yield is 3.15%. Shares cost $25 (up nearly 20% YTD).

#7 Camping World Holdings Inc. (CWH)

A recreational vehicles company, Camping World’s market cap is $498.159 million. Shares are trading at $7.93 (down 18.55% YTD). CWH’s forward dividend yield is 5.52% and dividend payout ratio is 272.73%.

#6 TFS Financial Corp. (TFSL)

This $4 billion consumer banking and mortgage company has a dividend payout ratio of 353.13% and a forward dividend yield of 8.06%. The stock ($14.35 per share) is up 7.25% YTD.

#5 Algonquin Power & Utilities Corp. (AQN)

Algonquin is a $5 billion utility company with a dividend payout ratio of 371.43% (forward dividend yield: 3.72%). Shares cost $6.95 (up 11.94% YTD).

#4 SFL Corp. Ltd. (SFL)

SFL is a $1.487 billion global maritime shipping company. Its stock is trading at $11.20 (up 43.42% YTD). Its forward dividend yield is 7.27%, but its dividend payout ratio is 415.38%.

#3 Insperity Inc. (NSP)

Insperity, which provides HR and compliance solutions, has a forward dividend yield of 10.81%, but a dividend payout ratio of a whopping 500%. Trading at $22.21, NSP is down 42.64% YTD. The company’s market cap is about $830 million.

#2 Kinetik Holdings Inc. (KNTK)

An oil and gas firm Kinetik’s dividend payout ratio clocks in at nearly 761%. The stock is up 30.76% YTD, trading at $47.21. The market cap is $3.023 billion. KNTK’s forward dividend yield is 6.92%.

#1 Brightstar Lottery PLC (BRSL)

Global lottery company Brightstar’s dividend payout ratio is an astonishing 888%. With a market cap of $2.498 billion, the firm’s stock is down 12.69%. Shares are $13.49. YTD. The forward dividend yield is 6.78%.

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