4 Dividend Stocks You Need to Sell Now

It’s a classic death spiral. I’m talking about the flight to dividend-paying—and dividend-growing—stocks in the past eight years. It’s easy to see what triggered it: US Treasuries don’t offer pay enough to cover inflation, and despite President-Elect Trump’s inflationary policies—more on those below—that won’t change anytime soon. That’s prompted income-starved investors to pile into higher-yielding options, like municipal bonds, utility stocks, corporate bonds and dividend-growth stocks. These are all good choices, of course. But here’s where the death spiral comes in: the rush into these investments has dragged down their dividend yields (because you calculate yield by dividing the annual dividend by the current share price), sending investors into even riskier areas of the market. The pain is obvious in dividend-growth stocks. Yields have plunged to less than 2% on many of the most popular ones, while their price-to-earnings (P/E) ratios have soared. ... Read more