This 8% Yielding Food Stock's Dividend Could Be Unsustainable
- By Ben Reynolds
Investors hungry for dividends can look to the food and beverage industry. Many companies that feed their customers also feed their shareholders with dividends. But as always, investors need to carefully assess the sustainability of a company's dividend payout before buying a stock.
While high dividend yields are enticing on the surface, they can give investors a great deal of heartburn if the underlying company has too much debt or deteriorating profits. One of the worst outcomes for an income investor is for a company to cut its dividend. Not only does this result in less dividend income, in most cases the stock price also drops.
Warning! GuruFocus has detected 5 Warning Signs with BGS. Click here to check it out.
high dividend yields can sometimes be a sign of trouble. This appears to be the case with B&G Foods (BGS), which has an attractive 8% dividend yield. But underneath the surface, B&G is flashing warning signals that indicate the dividend is not sustainable at the current level.
