In my 20-plus years of investing, I’ve learned that you can never be too greedy, even when it comes to dividend stocks. What I mean by this is that some companies offer unrealistic high dividends. This inflates their stock price as investors flock to get a piece of the action, but then eventually, they announce that they have to make cut because—surprise, surprise—it’s not sustainable.
We’ve seen it as recently as last year when Leggett & Platt cut their dividend payouts by almost 90%, resulting in its stock price taking a short dive off a high cliff. Though, it’s not always that way. Dividend King 3M had to cut following its healthcare spinoff and other litigation that resulted in its dividend being chopped in half.
