quick news this morning: Yellow Media (TSE:YLO) just announced a dividend cut from $0,65 to $0.15.
YLO is dropping faster than a F1 this morning (currently down 30% at $1.34. I don’t have much hope for this stock to be honest.
I recently discuss how dangerous chasing high dividend yield is (especially when combined with high dividend payout ratio). Once again, moving toward a more conservative dividend investing approach might be the solution!
I hope you don’t own any YLO… you can’t say I didn’t warn you!
Not for nothing, but isn’t Yellow Media the company that publishes the Yellow Pages? I can’t believe they still have those in the age of ubiquitous Internet devices… people either google phone numbers or use a smart phone app. I’m not surprised they’re having trouble.
@Mike,
They are publishing the Yellow Pages!
They are trying to make the internet turn but it appears to be a slippery curve!
What I find interesting is that companies ran by YPG, RedFlagDeals should be making enough money with all the ads they have.
What is the future of the Yellow Pages?
I never invested on a dividend basis. And you proved why. Why bother investing for a few percentage points a year when you could be focusing your time on making big money off of trades?
I don’t follow YLO, but this does go to show you that you should never buy based on yield. I like at least 3%, and will go after 5%+ when I can get it, but it has to be sustainable. If a company is paying out an unreasonable portion (80%+) of their earnings in the form of dividends with no growth in sight…then it’s probably prudent to stay away. This advice, of course, is a little different for REIT’s and MLP’s.