3 Stocks in Danger of Dividend Cuts

We took a look at 9 dividend paying stocks to see if any were at risk of a dividend cut in the foreseeable future. Here’s what we uncovered. AvalonBay Communities (AVB): AvalonBay is bouncing, but with a plan to invest around $700 million in new properties, the company will be expending a large amount of resources on a risk-fraught move. The economy is not out of the woods yet, but AvalonBay has just put a pretty big bet in place with what may turn out to be unwarranted optimism. Also, even relative to its peers, its earnings multiple is rich, around 85. AVB has a 229% payout ratio relative to earnings, so unless it can get its earnings power up, there is a possibility that continued payments of the 2.75% dividend will come to a halt. AvalonBay is $4B in debt with around $250 million in cash on its books. Shares have risen steadily over the past 6 months from $18 per share last summer. When inflation and interest rates rise, shares of REITs like AvalonBay could depreciate, creating a downward yield spiral and a hit to the REITs real bottom line. We see the spectre of inflation on the…