A Reduced Payout Could Be Incoming for These High-Yield Dividend Stocks

There are two main investment sectors that are currently at risk for dividend cuts in the wake of the recent economic downturn and recession.

The first one is largely for political reasons, and that is the banks and other financial institutions. The second one is the real estate investment trust (REIT) sector, and more specifically the mall REITs. The mall REITs were already in a precarious place, even before the coronavirus pandemic closed most of their tenants. As a result, these two sectors contain stocks that are some of the most likely to enact dividend cuts.

While many of the banks have voluntarily agreed to suspend stock buybacks for the time being, that hasn't enough for politicians worried that they might have to enact politically unpopular bailout actions or for environmental, social, and governance (ESG) funds worried about investing in companies that aren't operating responsibly and in the best interests of the country rather than just in the best interests of their investors.

Source Fool.com