Is the dividend artificially high because the stock price is under pressure due to legitimate concerns about the short- or long-term viability of the company?
hese issues matter because a dividend that is too high can force a company to cut its dividend in the future if there is a drop in earnings, negative corporate news or a broader challenge such as the financial crisis of 2008-2009. These are common occurrences. Investors need to tighten the focus of their search and look beyond high dividends toward sustainable and growing dividends.