You might want to avoid these popular dividend stocks

You might want to avoid these popular dividend stocks: Dividend stocks have long been considered a staple in many investors’ portfolios. After all, what’s not to love about receiving a steady stream of passive income while you watch your investment grow over time?

You might want to avoid these popular dividend stocks

But while the idea of investing in dividend stocks is enticing, not all of them are created equal. In fact, some of the most popular dividend stocks on the market today are actually best avoided. In this article, we’ll take a closer look at why you might want to avoid these stocks and what you can do instead to build a healthy and diversified portfolio.

Philip Morris International (PMI)

First on the list is tobacco giant Philip Morris International (PMI). While PMI is a household name and has been a reliable dividend payer for years, the company has been facing numerous challenges in recent times. For starters, the rise of vaping and declining smoking rates have taken a toll on PMI’s revenue and profitability.

Moreover, PMI has also been facing increased regulatory and legal hurdles, with governments around the world taking a tougher stance on tobacco products. The company’s dividend yield may look attractive, but the risks associated with investing in PMI are simply too high.

General Electric (GE)

Next up is General Electric (GE), a conglomerate that operates in a wide range of industries, including energy, aviation, and healthcare. While GE has been a dividend payer for over a century, the company has been grappling with numerous challenges in recent years.

GE’s financial performance has been poor, with the company posting consecutive quarterly losses and missing earnings expectations. The company’s dividend yield may look enticing, but the underlying fundamentals of GE are simply not strong enough to support a healthy and sustainable dividend.

Exxon Mobil (XOM)

Lastly, we have Exxon Mobil (XOM), one of the largest oil and gas companies in the world. While XOM has been a dividend payer for over a century, the company has been facing numerous challenges in recent years, including declining oil prices, increased competition, and the rise of renewable energy.

Additionally, XOM’s dividend yield may look attractive, but the company’s dividend is simply not as secure as it once was. With the world moving towards cleaner and more sustainable energy sources, investing in XOM may not be the best idea for the long-term.

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What can you do instead to build a healthy and diversified portfolio?

So, what can you do instead to build a healthy and diversified portfolio? First, consider investing in a low-cost index fund, such as the S&P 500. This will give you exposure to a broad range of stocks, including many of the world’s largest and most successful companies.

Wide range of industries

Additionally, consider investing in dividend-paying stocks from a wide range of industries, such as healthcare, technology, and consumer goods. This will help to diversify your portfolio and reduce your risk.

Be patient and stay disciplined

Finally, be patient and stay disciplined. Investing in stocks can be volatile, and there may be periods of uncertainty and market turbulence.

But by staying focused on your long-term goals and avoiding the popular dividend stocks listed above, you can build a healthy and diversified portfolio that will provide you with a steady stream of passive income for years to come.

Conclusion

In conclusion, while the idea of investing in dividend stocks may be tempting, not all of them are created equal. By avoiding the popular dividend stocks listed above and instead focusing on a diversified portfolio, you can build a healthy and sustainable investment portfolio that will provide you with a steady stream of passive income for years to come.