High-yield dividend stocks can seem attractive at first glance. However, investors looking to create a sustainable stream of passive income should look beyond a company’s high dividend yield and further analyze its fundamentals to see whether its shareholder payout is sustainable across market cycles.
In the last two years, macro headwinds such as rising interest rates, sticky inflation, and a sluggish global economy have resulted in dividend cuts for companies in capital-intensive sectors such as real estate and utilities - and even former Dividend Aristocrats, like the recently removed Dow Jones Industrial Average ($DOWI) component Walgreens Boots Alliance (WBA).
