Today’s Wall Street Journal featured my advice on dividend stock in two articles in the Wealth Adviser section of the paper.
Both articles highlight my advice to focus more on the cash flows of a company and the stock’s valuation. A high dividend yield can mask risk of capital loss.
If the stock goes down by 20%, then the 5% dividend yield does you no good. Many dividend stocks , ETFs and mutual funds get my Very Dangerous ratings because their valuations have been bid up too high and their cash flows are poor. Popular dividend stocks could be ticking time bombs.