As prices fall, many dividend yields rise and look more attractive. However, a dividend is only as reliable as the firm’s cash flows. Given that cash flows are at higher risk these days, firms who struggled to pay dividends before the crisis may be forced to cut their dividends while GDP suffers. Investors need to do diligence on fundamentals to assess the reliability of dividend yields.
Below, we identify firms with seemingly attractive dividend yields, but without the cash flows to sustain them. These firms are most at risk of cutting dividends in the future,