Make your money go further for just 25p per day

PREMIUM

Dividend dogs vs diamonds: Part 1 – beware the yield

21/05/2019 · Barratt Developments (BDEV)  · Bovis Homes Group (BVS)  · BT (BT.A)  · Centrica (CNA)  · Direct Line Insurance Group (DLG)  · Evraz (EVR)  · Imperial Tobacco (IMB)  · Persimmon (PSN)  · SSE (SSE)  · Vodafone (VOD) 

Dividends FTSE 100 UK

Centrica-owned British Gas van

A high yielding dividend might be very tempting to investors seeking a little extra income, but buying a stock for a yield which is unsustainable is a worryingly easy way to lose money. Vodafone is proof of that. In part one of our mini-series on income investing, we pick out the companies which look like they might be the next victims of a dividend cut.


An 8% dividend yield is a major red flag for income investors. It is shareholders’ polite way of telling company management and analysts that they do not have faith in their forecasts for both profits and the pay-out.

More often than not, they are right. Russ Mould, investment director at AJ Bell, said: “It's not perfect but the market often does a pretty good job of factoring in news ahead of time”. That is certainly true…

Continue reading our content…

Gain access to all our excellent content for just £90 per year, that’s just 25p per day for financial freedom.
  • Unlimited access to our market-beating portfolios
  • In-depth coverage of many of the world’s great companies
  • Unique insights from our top research team
Register FREE for access to limited content.
  • Company and markets insights
  • Sponsored content
  • Podcasts

Previous article Next article

Have your say

Log in or register to view or add comments.

DON'T MISS OUT!

Get top investment ideas to help safeguard and grow your wealth.

Invaluable insight from the exciting world of smaller companies.

REGISTER FREE

DON'T MISS OUT ON OUR PREMIUM CONTENT

Become a champion investor for just £90 a year. Benefit from our high performing portfolios:

START FREE TRIAL

More on Barratt Developments

3 dividend stocks with reliable 6%+ yields

16/09/2022 · Portfolio

As you can discover in our update here, companies in our Income Boosters dividend portfolio are continuing to…


Income Boosters: Yields up to 10% on offer?

22/07/2022 · Portfolio

A record result from one of our portfolio stocks has supported a return to…


More on Bovis Homes Group

How are the housebuilders coping with the UK property market?

11/07/2019 · Company Insights

The share prices of many of the UK’s major housebuilders suggest that investors are wary about…


Dividend dogs vs diamonds: Part 1 – beware the yield

21/05/2019 · Company Insights

A high yielding dividend might be very tempting to investors seeking a little extra income, but…


More on BT

If Huawei is unravelled can BT and Vodafone pay their dividends?

10/07/2020 · Company Insights

The UK’s two telecoms giants have always been held for their income. Ramping costs have already…


BT: should investors wait for dividend return?

04/06/2020 · Company Insights

BT Group has suspended its dividend, warning shareholders not to expect a cash payout until December…


More on Centrica

Coronavirus impact: 24 July - more online winners and a hydrogen play to tempt us

24/07/2020 · Company Insights

Online retailers continue to benefit from consumers reluctance to visit physical stores, but we are perplexed…


FTSE shuffle: September promotions and demotions

29/08/2019 · Company Insights

In the first week of September, the FTSE 100 will be shuffled to reflect new market…


More on Direct Line Insurance Group

Income Boosters: 10% dividend yield potential

09/08/2022 · Portfolio

Reassuring updates from two of our income picks suggest that both are likely to deliver strong…


Income Boosters: Yields up to 10% on offer?

22/07/2022 · Portfolio

A record result from one of our portfolio stocks has supported a return to…


More on Evraz

Dividend dogs vs diamonds: Part 1 – beware the yield

21/05/2019 · Company Insights

A high yielding dividend might be very tempting to investors seeking a little extra income, but…


Good governance: five steps to investment success

16/04/2019 · Company Insights

Weak corporate governance can have a major impact on shareholder returns and is therefore seen as…


More on Imperial Tobacco

Coronavirus impact: 31 March - quality shines through

31/03/2020 · Company Insights

Many of the smaller companies we follow are still dominated by the founders and family. It’s…


Weekend round-up: Six big business stories you don’t want to miss

04/10/2019 · Company Insights

Stock markets shattered on Wednesday, welcoming a woeful start to Q4 which feels worryingly familiar. Here…


More on Persimmon

Do our Income Boosters need a housebuilder?

29/03/2021 · Portfolio

With UK housebuilders offering yields up to 8%, should we add one to our Income Boosters dividend…


Income Boosters: Does our dividend portfolio need a housebuilder?

18/09/2020 · Portfolio

Housebuilders have become income favourites in recent years, but our income portfolio doesn't have any exposure…


More on SSE

How to invest in renewable energy and make a profit

01/11/2019 · Company Insights

In 2020, an estimated £8.4bn is expected to be spent on renewable energy projects in the…


Dividend dogs vs diamonds: Part 1 – beware the yield

21/05/2019 · Company Insights

A high yielding dividend might be very tempting to investors seeking a little extra income, but…


More on Vodafone

Income Boosters update: these yields look safe

29/07/2022 · Portfolio

Our Income Boosters portfolio is continuing to deliver reliable dividends in tough conditions.


Income Boosters: 6% yield plus dividend growth

27/05/2022 · Portfolio

Four of our high yielding Income Boosters stocks covered here reported steady progress in May, despite increasingly challenging economic…


More Company Insights

Bonkers Bargains: a rare find indeed

03/10/2022 · Argentex Group PLC

AIM new arrivals and leavers September 2022

03/10/2022 · Aurrigo International

Horrendous updates

More on Barratt Developments

3 dividend stocks with reliable 6%+ yields

Income Boosters: Yields up to 10% on offer?

Income Boosters: portfolio change brings 8% yield

Do our Income Boosters need a housebuilder?

More on Bovis Homes Group

How are the housebuilders coping with the UK property market?

Dividend dogs vs diamonds: Part 1 – beware the yield

Help to Buy: has it worked?

UK Housebuilders: bargain or value trap?

More on BT

If Huawei is unravelled can BT and Vodafone pay their dividends?

BT: should investors wait for dividend return?

Flash News: Brexit day and Boeing’s blues

UK dividends are unsustainable

More on Centrica

Coronavirus impact: 24 July - more online winners and a hydrogen play to tempt us

FTSE shuffle: September promotions and demotions

The week at a glance: 29 July – dividend disasters

Dividend dogs vs diamonds: Part 1 – beware the yield

More on Direct Line Insurance Group

Income Boosters: 10% dividend yield potential

Income Boosters: Yields up to 10% on offer?

Income Boosters: up to 9% yield from our financial stocks

Income Boosters portfolio:  7% yield on offer

More on Evraz

Dividend dogs vs diamonds: Part 1 – beware the yield

Good governance: five steps to investment success

More on Imperial Tobacco

Coronavirus impact: 31 March - quality shines through

Weekend round-up: Six big business stories you don’t want to miss

Weekly round-up: Hong Kong calling

Dividend dogs vs diamonds: Part 1 – beware the yield

More on Persimmon

Do our Income Boosters need a housebuilder?

Income Boosters: Does our dividend portfolio need a housebuilder?

Coronavirus impact: 29 April - surging profits and depression era declines

European expansion boosts IHT qualifying Michelmersh

More on SSE

How to invest in renewable energy and make a profit

Dividend dogs vs diamonds: Part 1 – beware the yield

More on Vodafone

Income Boosters update: these yields look safe

Income Boosters: 6% yield plus dividend growth

Income Boosters: Strong cash flows support rising payouts

Income Boosters: Our big yielders target growth

More Company Insights

Bonkers Bargains: a rare find indeed
AIM new arrivals and leavers September 2022
Horrendous updates

Sign-up to our free email updates

SIGN UP