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3 Dividend Stocks to Avoid in 2014

These stocks have run their course...dump them now

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AT&T-t-stock-dividend-stocksThe mustard is already coming off this hot dog. Shares of AT&T (T) have collapsed after peaking at a price of $39 per share this past spring. Along the way down, however, the stock found a bid from investors attracted to the 5% dividend. Don’t be one of those investors. Analysts expect the company to grow profits by 8% in 2014. At current prices, shares trade for 13 times 2014 estimated earnings.

I don’t think it’s ever a good idea to pay a double-digit multiple of earnings when a company is growing profits at a single-digit clip. It is hard to see where the catalyst for future growth will be for AT&T. The smartphone phenomenon has essentially run its course.

AT&T will be lucky in my opinion to grow profits by 8% next year. I would definitely avoid this stock in 2014.

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