Meet the Highest-Yielding Stock in the S&P 500. Does Its 10.2% Yield Make It a No-Brainer Buy for Dividend Investors?
Conagra is a consumer staples company, but that fact shouldn't lull dividend investors into a false sense of security.
Overview
Conagra (NYSE: CAG) operates in the consumer staples sector, a market segment generally considered a safe haven for dividend investors. However, the stock's 10.2% dividend yield is an important signal of risk. For reference, the S&P 500 index (SNPINDEX: ^GSPC) is yielding just 1%, while the average consumer staples company yields 2.1%. You need to dig in a little more before you buy this ultra-high-yield food maker.
At this point, Wall Street appears to expect Conagra to cut its dividend. Given the well-above-peer-average yield, the cut could be 50% or more. As a dividend investor, you need to heed the market's warning and carefully consider the possibility of a cut.
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Originally published at www.fool.com.