The Intersections Between A Massive Yield And A Massive Caveat

It's not something novel. Wherever you find a massive dividend yield, it necessarily intersects with a massive caveat. The main problem usually lies in understanding what the caveat is. It's no different with the aptly named Intersections (INTX). Here, too, we are seeing a 9% dividend yield that comes with a significant warning. So what's the warning? First, we need to understand what INTX's main activity is: It's identity protection. And how it is (or was) sold: It is (was) mainly marketed through financial institutions, as a subscription service that is (was) usually added to a financial product such as a credit card. Now, why do I keep saying "was"? Therein lies the problem. Due to regulatory pressure from the Consumer Financial Protection Bureau, including a lawsuit that was settled by Capital One, Bank of America (BAC) -- a very significant customer of INTX -- decided in... Read more

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