1 Warning Sign for Dividend Investors

The following video is from this week's Motley Fool Money radio show, with Chris Hill, Ron Gross, James Early, and Joe Magyer. What do Arch Coal, Cross Timbers Royalty Trust Units, Dominion Resources Trust, and Hugoton Royalty Trust have in common? All four cut their dividends in the first half of 2012. Shares of Supervalu plummeted last week after the company delivered bad earnings and announced that it's suspending its dividend. In this segment, the guys analyze the huge challenges Supervalu faces, as well as what it means for investors when a company suspends its dividend. James cites a comprehensive study that found that stocks that cut their dividend delivered a negative return for shareholders, resulting in a big red flag for investors.

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The article 1 Warning Sign for Dividend Investors originally appeared on Fool.com.

Chris Hillowns no shares of any of the companies mentioned. The Motley Fool owns shares of Supervalu.Motley Fool newsletter serviceshave recommended buying calls on Supervalu. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days. The Motley Fool has adisclosure policy.

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