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Yield Traps? 3 High Dividend Yield Stocks I Refuse to Buy

The Dividend Diplomats discuss three high-dividend yield stocks they refuse to buy, focusing on potential yield traps. They analyze Hormel Foods (HRL) and Clorox (CLX), examining their dividend yields, payout ratios, growth rates, and recent stock performance, expressing concerns about dividend sustainability and company performance in the current market.

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Tickers discussed in this post

NKENeutralHigh ConvictionSignal-backedPrimary

Nike (NKE) is considered the "trappiest of all the yield traps" with a 96% payout ratio, a PE of 22, and a 4.27% yield that is not sustainable given the business's current trajectory.

CLXNeutralMedium ConvictionSignal-backedPrimary

Clorox (CLX) is mentioned as the second stock in their 'yield trap' discussion, with its ticker symbol provided.

HRLNeutralMedium ConvictionSignal-backedPrimary

Hormel Foods (HRL) is a potential yield trap due to its high 5.43% dividend yield, 78% payout ratio, and 50% stock price drop over 5 years, raising concerns about dividend sustainability.

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