When you’re buying stocks that sport a nice dividend, you need to be very careful where the stocks are in their cycle before committing. Income stocks are for the long haul. If you’re buying with a dividend in mind, you’re expecting that the 3% to 5% dividend yield will be a boost to the growth of the overall stock.
If you get a steady grower that’s boosting its stock price 6% a year while throwing off a 3% dividend, that’s a nice, safe 9% grower that isn’t going to keep you up at night.
But if you get that stock when shares are wallowing and the company is struggling, there’s a good chance that the company will cut its dividend, which creates all sorts of negative consequences.
Below are seven dividend stocks that look like trouble right now, either because of industry problems or specific corporate challenges. Either way, this is not the time to be stepping into them, or expecting things to get better before they get worse.