Danger Lurks for These 3 High-Yield Dividend Stocks
The big picture matters. At least, it does when you are buying a high-yield stock on the basis that you will get a long-term stream of income from it.
In the case of telecom and media company AT&T (NYSE: T), and advertising agencies Omnicom (NYSE: OMC) and Interpublic Group of Companies (NYSE: IPG) there's reason to believe that all three are high-yielding value traps (7.3%, 5.2%, and 6% dividend yields respectively) with dividends that may not prove sustainable over the long term. Here's why.
The telecom giant's mammoth free cash flows (around $29 billion in 2019) ensure that its annual dividend of around $14.9 billion or $2.08 per share is easily sustainable for years. Meanwhile, AT&T bulls are hoping the advent of 5G will produce a growth opportunity for wireless networks.
Source Fool.com
