5 'Dead Money' Dividend Stocks To Avoid

A common strategy that most investors will use is to identify strong buys based on the company's ability to pay dividends. This is from the thinking that only the strongest firms can afford to pay shareholders a regular dividend. The fact that this requires actual cash from the earnings means that these firms will have more stability and consistent growth. Over the course of time, this could provide investors with an above-average return. To determine if some of the strongest companies in the markets meet this criterion requires examining Alcoa (AA), FedEx (FDX), United Parcel Service (UPS), Lowes (LOW) and PepsiCo (PEP). Alcoa Alcoa yields 1.20% and has a forward price earnings ratio of 10.00. The balance sheet includes $24.26 in revenues, $1.9 billion in cash and $9.37 billion in debt. The firm has profit margins of 4.31%, operating margins of 8.64% and a return on equity of 7.22%. The... Read more