11 Stocks to Sell From Your Passive Income Dividend Portfolio

by: Intelligent Speculator

How many of us carry dead meat in our portfolios? I bet we all do to some extent right? I mean it’s always tempting to go after stocks that already offer a high dividend yield. So I did some more screening and came up with the worst of the worst:

  • Weyerhaeuser Co (NYSE:WY)
  • Altria Group Inc (NYSE:MO)
  • Masco Corp (NYSE:MAS)
  • Nicor Inc (NYSE:GAS)
  • Sempra Energy (NYSE:SRE)
  • Northeast Utilities (NU)
  • CenterPoint Energy Inc (NYSE:CNP)
  • H&R Block Inc (NYSE:HRB)
  • NiSource Inc (NYSE:NI)
  • Constellation Energy Group Inc (NYSE:CEG)
  • Molson Coors Brewing Co (NYSE:TAP)

Why are these companies hard to sell and how did I come up with them?

First off, I simply took all companies in the S&P500 that pay a dividend of 2% or more. From there, it was quite simple. Do any of these companies have sales declining by 5% (or more) on average over five years? I mean you have to do very badly to regress by so much over 5 years don’t you think? Sales are the number one way for me to find this dead meat because a company that has declining sales will usually have declining profits and eventually declining dividends. There’s always a possibility that declining sales would be caused by the sale of a unit or part of a company and further analysis will be required for that.

Here are the complete numbers for these companies:

Ticker Name Price Dividend Yield Payout Ratio Sales change 5 year average
WY Weyerhaeuser Co 21.98 2.73 664.68 -19.37
MO Altria Group Inc 26.55 5.73 77.98 -18.98
MAS Masco Corp 13.22 2.27 N/A -10.75
GAS Nicor Inc 52.8 3.52 61.42 -9.08
SRE Sempra Energy 53.19 3.61 51.56 -9.03
NU Northeast Utilities 33.48 3.29 46.84 -7.83
CNP CenterPoint Energy Inc 17.82 4.43 72.35 -7.39
HRB H&R Block Inc 17.67 3.4 41.09 -6.73
NI NiSource Inc 18.91 4.87 86.8 -6.68
CEG Constellation Energy Group Inc 32.88 2.92 N/A -6.1
TAP Molson Coors Brewing Co 47.76 2.34 30.05 -5.18

Do you agree? What are your thoughts and would you own a company that has such negative momentum in its underlying business? If so, under what circumstances?