Dividend cuts: The stocks most at risk

After the rush to yield, John Addis asks which stocks are most exposed to a dividend cut (and drags out a long large table to make his point).

It was a straightforward premise. The stock prices of high yielding companies have risen because investors aren’t getting the yields they want from bank deposits. What if we looked at earnings per share, dividend payout ratios and dividend cover over the last five years to see which companies were most at risk of a dividend cut?

The thought was triggered by the ‘rush to yield’, a slightly misleading term because declining interest rates have also pushed up the prices of growth stocks like Domino’s Pizza (PER: 51), REA Group (PER: 32) and Technology One (PER: 36).

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