I’m on a never-ending quest to uncover the best on the indexes. This is part of a plan to build a steady stream of passive income before I retire. However, during my search, I occasionally come across shares that I wouldn’t go near.
Throwing money into stocks only to see the dividends cut and the share price collapse is an investor’s nightmare. With that in mind, here are two dividend-paying stocks that I would give a wide berth to for now. Off on the wrong foot First up is shoe manufacturer and marketer ( ).
I don’t have anything against the popular leather boots but things just aren’t going well lately. It’s had five profit warnings in the past three years, the most recent on 16 April. By March next year, it fears profit before tax could be down by as much as 66%.
In fairness, 2023 had more profit warnings for UK companies than during the 2008 financial crisis, so it’s not alone. As a specialist premium brand, it sells the type of products that many consumers simply can’t afford during economic hardship. At a much higher price point, leading UK luxury fashion house is facing a similar struggle.
Its saving grace is that it’s a strong brand with a history of good management. When (or if) inflation falls and the economy recovers, I’d expect to see it find its feet again. But until then, the attractive 6.
8% dividend yield may be cut to save on costs. It’s only been paying dividends for a few years and already forecasts predict the yield will fall to 3.3% i.