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RE: LeoThread 2025-07-01 12:43

in LeoFinance3 months ago

Part 6/9:

  1. Problems with the Business: Recognizing operational or market problems is crucial. Consistency in revenues and growth trajectories is essential for sustainable dividend payments. A significant drop in stock prices, coupled with poor business performance, often precedes a dividend cut.

Potential Yield Trap Examples

To illustrate these concepts, the podcast hosts discussed three companies, highlighting their conditions relative to the yield trap indicators:

1. CenturyLink (CTL):

  • Yield: Over 11%, indicating an unusually high dividend relative to the sector.

  • Debt: Debt-to-equity ratio of 1.62, markedly higher than AT&T.

  • Payout Ratio: Over 100% based on projected earnings.

  • Cash Flow: Paid out dividends exceeding free cash flow.