Q: AD is now paying a 9% dividend which makes it very tempting. I have been investing a long time and have generally found high yield dividend stocks often disappoint. On the other hand I also understand that there are moments where the market will misprice stock values and create opportunity.
So in the case of AD am I correct that holding the stock (which I do) is reasonable and that the stock should appreciate to a value supporting a 4 to 6% yield.
On the other side, at a 9% yield the general market does not share my view and I think predicts a material event or dividend cut.
I have a long time frame and high risk tolerance.
So my question is when does the high yield give you cause for concern?
Thanks John
So in the case of AD am I correct that holding the stock (which I do) is reasonable and that the stock should appreciate to a value supporting a 4 to 6% yield.
On the other side, at a 9% yield the general market does not share my view and I think predicts a material event or dividend cut.
I have a long time frame and high risk tolerance.
So my question is when does the high yield give you cause for concern?
Thanks John