Image Source: Eugene Zemlyanskiy
By Brian Nelson, CFA
As many investors know, a company’s stock can often become cheap for good reasons. That is, the stock is not trading cheaply because of Mr. Market’s irrational behavior, but instead is trading at depressed levels due to deteriorating underlying fundamental characteristics that actually justify its current share price, even if traditional valuation techniques (read multiple analysis) suggest the firm’s shares are inexpensive. On a similar note, firms that boast high dividend yields may do so because the market has little confidence in the sustainability of its dividend and believes a cut may be just around the corner.
Though we fall short of saying stocks with materially negative Dividend Cushion ratios–our dividend-cut predictive indicator–will slash their respective dividends immediately or anytime soon, the Dividend Cushion ratio reveals stocks that may be at significant risk for a dividend cut in the coming years. We think the dividend-growth investor should generally be aware of the risk of companies with materially negative Dividend Cushion ratios. Use the download below to uncover the most risky dividends on the market.
How to filter data in Excel? Click here.
Download the screener or build your own screener here (xls).
Important Note: The data and rankings are updated frequently and are current as of the date of this download. Valuentum may have updated the stock and dividend reports of companies after the published date of this download. Members should view the rankings in this download as a starting point for further research and always access the individual stock page of each desired company on our website for its most recent ratings, metrics, and valuation information. If you have any questions about our services, please contact us at info@valuentum.com.
Note on Recent Improvements to the Website
In everything we do, from combining value and momentum into a process at the stock-selection level, to developing the forward-looking Dividend Cushion ratio, which has helped income investors, to expanding upon the concept of the economic moat to establish the Economic Castle rating, everything we do puts INVESTORS FIRST — and frankly, these three metrics barely scratch the surface of what we do and the research and analysis that we continue to incorporate into our work. In the spirit of making our data as useful as possible, we wanted to let you know we’ve made a couple improvements to the website.
The first improvement is that now all generalized stock screens on the website (on the left column, as in this article) will be a downloadable Excel file, instead of an archived article with a list of stocks. The descriptions of the screens will be the same, but you’ll be able to use that downloadable file to come up with your own screen with the data provided. The information in the downloadable Excel file and the information on our stock pages will be updated at the end of each week such that readers can access the most up-to-date information in either a screen Excel download or on the stock page. Please be sure to access the stock price chart on each stock page for the most recent stock price information, and the valuation analysis behind our fair value estimates can always be found in the 16-page report (please note each stock and dividend report has an ‘as of’ date on them).
The second improvement is related to enhancing website functionality. We’ve invested resources to improve our stock pages, where up-to-date information can be found, so we no longer need lists of company reports on the website, per se. Specifically, we are now doing away with the list of Dividend Reports (on the right column of the website) because we think it makes sense for members to access that information on each company’s stock page, where the most recent stock price chart, company commentary, press releases, its stock report (with valuation analysis), and the dividend report (with Dividend Cushion ratio), among other considerations, reside. There is a tremendous amount of analysis for each company on each stock page. Here is one on General Mills (GIS), for example: