April 25, 2017

3 Stocks Could Double Their Dividends -- But Shouldn't


A big dividend raise isn't always the right move for a business.



Everybody loves dividends. I mean, seriously, who doesn't love a stock that pays you cash as a thank-you for investing? Additionally, dividends are usually a solid indicator that a company is actually making money -- after all the financial finagling, it still has the cash to schedule payments to investors. Escalating dividends are often taken as a sign that management is particularly bullish on the company's future -- so much so that they're willing to hike how much they pay investors each quarter.

It's understandable, then, that the idea of a company doubling its dividend is exciting. To get paid literally double what you were previously being paid is great on its own, but it also means the company has the wherewithal to sustain all that extra cash going out the door -- a sure sign of its strength as a business.

But there's a big difference between "can" and "should" -- and while these three companies can give income investors a doubled dividend, here's why they shouldn't.




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