7 Companies Paying Large Dividends That Are Fully Covered by Earnings

Income seeking investors often like to screen for companies that pay handsome dividend yields. In some cases, dividend yields can be as high as or even higher than yields on corporate bonds. Unfortunately, companies that have paid large dividends in the past may be about to cut their future dividends, which is the primary reason for stocks trading at eye-popping historical dividend yields. For example, Nokia (NOK) trades at a published dividend yield of nearly 8%, but the company has warned of a sharp drop in earnings, making a dividend cut seem likely. In order to minimize the probability of a prospective dividend cut, we have looked for companies that pay dividend yields of at least 5% and are expected to earn sufficient income going forward to fully cover the anticipated dividend payments. History has shown that managements are reluctant to cut dividends to shareholders. As a result, if their... Read more