secmaven

Not All Dividend Stocks Are Overvalued

Be aware that high dividend paying stocks are likely to cut the dividend. GMR paid well for years out of its cash flow, not earnings, and dropped 75% of its dividend with the explanation that it needed to accumulate some cash. But strange things sometimes happen Advantage Energy Trust (a natural gas CAN ROY) eliminated its dividend entirely and the stock doubled. Atlas Pipeline used a $4.00 dividend promise as a lure to raise money from the big boys at $40.00 in an acquisition scheme. Assets were purchased at inflated prices and the stock cratered to 2 and change..now trading at 6 but no dividend.