Dividend payments continue to be hugely important to investors, both as a source of income and as a means of growing their portfolios. And dividend payments are growing. In 2023, dividend payments around the world hit a record $1.7 trillion, according to a report from British asset manager Janus Henderson Group (NYSE:JHG). Data shows that dividend payouts rose 5% year-over-year in 2023, with the fourth quarter seeing a 7.2% increase from the previous third quarter.
While dividends have been moving upward overall, many companies issued large dividend cuts or held their payouts to shareholders steady last year. In all, 86% of publicly traded companies either increased their dividends or maintained them at current levels in 2023. The other 14% lowered or eliminated their dividend, hurting their stock in the process. Investors may want to dump these three dividend stocks now.
Walgreens Boots Alliance (WBA)
U.S. pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) began the year by cutting its quarterly dividend payment to shareholders by nearly 50%. Walgreens said that it is lowering its dividend payout to 25 cents per share from 48 cents previously, a reduction of 48%. The company said the dividend cut was being made to help “strengthen its long-term balance sheet and cash position.”
Walgreens’ dividend yield still looks strong at 4.81%. But don’t be fooled. The company, and WBA stock, are in terrible shape. The dividend yield has been rising as the company’s share price has been declining. Year-to-date, Walgreens’ share price has fallen 22%. Through five years, the stock is down 67%. The situation is bad enough that WBA stock was recently removed from the Dow Jones Industrial Average and replaced by Amazon (NASDAQ:AMZN).
AT&T (T)
Legacy telecommunications company AT&T (NYSE:T) also famously cut its dividend payout to stockholders by nearly 50% in 2022. At that time, AT&T CEO John Stankey said the dividend cut would free up cash that could be used to boost the company’s financial results. Well, that certainly hasn’t happened. AT&T most recently reported weak fourth-quarter 2023 financial results and issued soft forward guidance.
T stock continues to perform poorly. Flat on the year, AT&T’s share price is down 7% over the last 12 months and has declined 26% in the past five years. A current dividend yield of 6.44% might look enticing to investors, but it’s a trap. The company continues to be dragged down by its wireline (landline phone) segment, which most recently posted a 10.3% sales decline in Q4 2023 from a year ago.
Intel (INTC)
In February 2023, chipmaker Intel (NASDAQ:INTC) cut its quarterly dividend payment from 36.5 cents per share to 12.5 cents, a decrease of 66%. The dividend remains at the same level today, offering shareholders a tepid yield of just 1.17%. However, as disappointing as the dividend payment from Intel has become, it’s a bright spot compared to the performance of the company’s stock.
This year, INTC stock is down 11%. The company’s shares are trading 20% lower today than where they were five years ago. The decline comes as Intel continues to report hit-and-miss financial results and runs into roadblocks with its efforts to pivot to becoming a microchip foundry rather than a chip designer. In February of this year, Intel announced a delay in the construction of a new $20 billion manufacturing plant in Ohio.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
