McDonald's Yields 3%, the Highest in Over 6 Years. Is the Dow Dividend Stock a Value Trap or Too Cheap to Ignore?
It's not hard to see why the rug got pulled out from underneath this dividend stock. Investors are just struggling to determine if it's a mistake that needs correcting.
Overview
All income-minded investors can agree that, generally speaking, higher yields are better than lower yields. Still, wise investors know to be suspicious when a dividend stock's yield reaches unusually high levels. It could be a temporary entry opportunity. Or, however, it might be the result of weakness that's ultimately a red flag.
That's the challenge anyone eyeing a new stake in fast-food restaurant chain McDonald's (NYSE: MCD) is facing right now. Shares of the usually strong performer have tumbled 26% from their February peak, pushing the stock's forward-looking dividend yield up to a multi-year high of 3%. Is this an opportunity to plug into a long-proven powerhouse name at a bargain price, or is McDonald's a value trap?
Details
First things first.
Source
Originally published at www.fool.com.
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