3 High-Yielding Dividend Stocks With Payout Ratios Over 100%
Using payout ratios to evaluate the health of a dividend stock is a quick way for investors to assess if a payout is too good to be true and due for a cut. Anything over 80% will likely raise some eyebrows, and at more than 100%, investors may skip a stock altogether. However, a payout ratio based on profitability isn't always a reliable metric to count on, as some businesses have significant expenses that don't affect cash flow.
Three stocks with payout ratios of more than 100% right now are Viatris (NASDAQ: VTRS), Altria (NYSE: MO), and Enbridge (NYSE: ENB). Should investors go for safer options, or are these underrated dividend stocks you can count on for some high payouts? Let's see.
Generic drugmaker Viatris pays an impressive yield of just over 5% right now. That's more than double the S&P 500 average of 1.7%. It would take a $20,000 investment in the stock to generate $1,000 in annual dividend income versus the nearly $59,000 you would need to invest to earn the same amount at the S&P's average rate.
Source Fool.com
