15 Stocks With Dividends in Danger

The following 16 companies have dividend payout ratios in excess of 100%.  In short, these companies’ stocks look ripe for a fall and their dividend payments are unsustainable.  What do you think the market knows about these companies that have kept their share prices propped up thus far?

To review: dividend payout ratio = dividends per share / earnings per share.  When dividends per share  are greater than earnings per share, the payout ratio is greater than 100%.  When this happens, it suggests that these companies are not earning a sufficient amount to finance future dividend payments.  And, of course, if the company’s intent is to pay out dividends in excess of earnings by raiding retained capital, shareholders’ equity stake in the company will be diluted.  Diluting shareholders’ equity in a company in order to pay them more dividends sounds rather like cutting off one’s nose to spite one’s face.

Following is a discussion of these companies:

  • Cheniere Energy Partners LP (AMEX:CQP): Dividend yield: 8.94%, payout ratio: 154.86%, earnings per share: $0.65, recent price: $19.02, and dividends per share: $1.70.  About the company:  Cheniere Energy Partners LP, through its subsidiary, will develop, own, and operate the Sabine Pass LNG receiving terminal currently under construction in western Cameron Parish, Louisiana on the Sabine Pass Channel.
  • Alico Inc. (NASDAQ:ALCO): Dividend yield: 1.57%, payout ratio: 225.46%, earnings per share: $0.09, recent price: $25.45, dividends per share $0.40.  About the company: Alico, Inc. is involved in various agribusiness activities and operations, including citrus fruit production, cattle ranching, sugarcane and sod production, and forestry.  The Company also leases land for farming, cattle grazing, recreation, and oil exploration.  Alico conducts operations in central and southwest Florida.
  • Healthcare Realty Trust Inc. (NYSE:HR): Dividend yield: 5.19%, payout ratio: 1,924.33%, earnings per share: $0.07, recent price: $23.10, dividends per share: $1.20.  About the company:  Healthcare Realty Trust, Inc, is a health care investment trust.  The Company purchases and leases investment properties in the United States.  Healthcare Realty finances long-term care facilities, hospital management companies, ambulatory and outpatient care companies.
  • Cornerstone Progressive Return (AMEX:CFP): Dividend yield: 16.79%, payout ratio: 133.88%, earnings per share, $1.15, recent price: $7.36, dividends per share: $1.24.  About the company:  Cornerstone Progressive Return Fund is a newly organized, diversified, closed-end management investment company.  The Fund’s investment objective is to provide long-term total return.  The Fund will invest primarily all of its assets in equity securities of US issuers, non-US issuers whose securities trade on a US securities exchange or over the counter.
  • Corporate Office Properties Trust (NYSE:OFC): Dividend yield: 4.58%, payout ratio is 490.26%, earnings per share: $0.38, recent price: $36.06, and dividends per share: $1.65.  About the company:  Corporate Office Properties Trust is a real estate investment trust which focuses on the acquisition, ownership and operation of suburban office properties located in high-growth submarkets.
  • Highwoods Properties Inc. (NYSE:HIW): Dividend yield: 4.79%, payout ratio: 197.91%, earnings per share $0.86, recent price: $35.52, and dividends per share: $1.70.  About the company:  Highwoods Properties, Inc., with its operating partnership and subsidiaries, develops, manages, leases and acquires suburban office and industrial properties.  Highwood has expanded into markets throughout the southeastern and midwestern United States.
  • Avalonbay Communities Inc. (NYSE:AVB): Dividend yield: 2.9%, payout ratio: 306.12%, earnings per share: $1.18, recent price: $122.99, and dividends per share.  About the company:  AvalonBay Communities, Inc. is a self-managed, fully-integrated multi-family real estate investment trust.  The Company focuses on the ownership and operation of institutional-quality apartment communities in high barrier-to-entry markets of the United States.  The markets are located in Northern and South California and in the Mid-Atlantic, Northeast, Midwest and Pacific Northwest region. 7 Large Cap Stocks With High Valuations You Must Know>>
  • Kimco Realty Corporation (NYSE:KIM): Dividend yield: 3.8%, payout ratio: 373%, earnings per share: $0.18, recent price: $18.67, and dividends per share: $0.72.  About the company:  Kimco Realty Corporation is a real estate investment trust.  The Company owns and operates neighborhood and community shopping centers with locations in multiple states as well as Puerto Rico, Canada, Mexico, Chile, Brazil, and Peru.  The Company also provides management services for shopping centers owned by affiliated entities and various real estate joint ventures.
  • CBL & Associates Properties Inc. (NYSE:CBL): Dividend yield: 4.72%, payout ratio: 385.49%, earnings per share: $0.21, recent price: $17.79, and dividends per share: $0.84.  About the company:  CBL & Associates Properties, Inc. is a self managed, self administered real estate investment trust.  The Company owns regional shopping malls and community shopping centers in the United States.
  • Weingarten Realty Investors (NYSE:WRI): Dividend yield: 4.28%, payout ration: 1,239.21%, earnings per share: $0.08, recent price: $25.71, and dividends per share: $1.10.  About the company:  Weingarten Realty Investors is a real estate investment trust with income producing properties primarily in the Southwest.  The Trust’s properties include shopping centers, office/service centers, apartment projects and office buildings.
  • Macerich Co. (NYSE:MAC): Dividend yield: 3.95%, payout ratio: 959.12%, earnings per share: $0.16, recent price: $50.61, and dividends per share: $2.  About the company:  The Macerich Company is a fully integrated, self-administered and self-managed real estate investment trust.  The Company acquires, owns, redevelops, manages and leases regional and community shopping centers located throughout the United States.
  • Camden Property Trust (NYSE:CPT): Dividend yield: 3.31%, payout ratio: 1,424.19%, earnings per share: $0.14, recent price: $59.25, and dividends per share: $1.96.  About the company:  Camden Property Trust is a self-administered and self-managed real estate investment trust.  The Company owns and operates multifamily apartment communities located in the Southwest region of the United States.  The properties are located in Texas, Florida, Missouri, North Carolina, Arizona and Kentucky.
  • Home Properties Inc. (NYSE:HME): Dividend yield: 4.07%, payout ratio: 419.63$, earnings per share: $0.54, recent price: $60.90, dividends per share: $2.48.  About the company:  Home Properties, Inc. is a real estate investment trust with operation in selected Northeast, Midwest and Mid-Atlantic markets in the United States.  The Company owns, operates, acquires and rehabilitates apartment communities.  Home Properties also manages commercial space.
  • Essex Property Trust Inc. (NYSE:ESS): Dividend yield: 3.22%, payout ratio: 374.04%, earnings per share: $1.15, recent price: $129.09, dividends per share: $4.16.  About the company:  Essex Property Trust, Inc. is a self-administered and self-managed real estate investment trust company.  The Company specializes in acquiring, developing and managing multifamily residential properties.  Essex has ownership interests in residential properties and commercial properties located in California, Oregon and Washington.
  • Kilroy Realty Corp. (NYSE:KRC): Dividend yield: 3.49%, payout ratio: 2,909.17%, earnings per share: $0.06, recent price: 40.47, dividends per share: $1.40.  About the company:  Kilroy Realty Corporation is a real estate investment trust engaged in the ownership, acquisition, development and operation of office and industrial properties located in California and Washington.

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