Dividends are one of the most popular ways companies return value to shareholders, and we love a good one.
But here’s the hard truth: not all dividend stocks are created equal.
After years of digging into Wall Street’s accounting tricks, I can tell you firsthand that many so-called “dividend plays” are traps for Main Street investors.
You’ve seen it before: a flashy dividend headline pumps the stock price. Then, one day, the company misses earnings or the market sentiment shifts… and the stock tanks. That’s when most retail investors realize they were the last to know.
At New Constructs we call these companies fake dividend stocks. Companies using dividends as smokescreens for bad stocks.
We recently hosted a live training to show you exactly how to spot the warning signs and avoid these landmines.
Because no matter how good the dividend, investing in a bad stock can cost you much more than the dividend pays. By the time the dust has settled, you can bet Wall Street left the building long ago.
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This article was originally published on May 30, 2025.
Disclosure: David Trainer, Kyle Guske II, and Hakan Salt receive no compensation to write about any specific stock, style, or theme.
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