If all management teams live within their means, there would be no need for an Endangered Dividends List. But reality is businesses take risks in good times that come back to burn them in bad ones. And the five companies on the EDL reporting Q1 results so far still have some very real vulnerability.
Korea Electric Power (Korea: 015760, NYSE: KEP) still hasn’t declared an annual dividend for payment next month. But the company is effectively priced for a zero payout, after announcing a record operating loss for 2021 and guidance for an even larger one this year.
AT&T Inc (NYSE: T) still sells for less than 8.7 times expected 2021 earnings. And PPL Corp (NYSE: PPL) yields 2.5 percentage points more than the Dow Jones Utility Average. Why the deep discounts? Because neither company’s management has come clean on how much they intend to cut dividends after completing major transactions early next year, other than to say they intend to “right size.”
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