Your Safest Dividend Stocks Just Became the Most Dangerous, Cramer Warns
Jim Cramer is sounding the alarm on stocks that income investors have trusted for decades, and the culprit is not a dividend cut or a earnings miss but something hiding in plain sight across every brokerage account.
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General Mills (NYSE:GIS | GIS Price Prediction) is in its 127th consecutive year of paying dividends, yet its stock is still down 24.24% through Monday’s close. That gap between reputation and results is the core of Jim Cramer’s latest warning on CNBC.
“Lately, high yielders no longer represent safety. If anything, they represent complacency, even danger,” Cramer said.
He highlighted General Mills, VICI Properties (NYSE:VICI), UPS (NYSE:UPS) and Edison International (NYSE:EIX), all staples of retirement portfolios.
When government debt pays nearly as much as a food maker or casino landlord, a stock must earn its extra risk. Several of these are falling short.
Treasury Yields Near 5% Rewrite the Math on Income Stocks
The 10-year Treasury yielded 5.17% on September 25, up 0.51 percentage points in a month and near the top of its one-year range. A stock’s value rests on its future cash. When rates elsewhere rise, each future dividend is discounted more heavily.
Income stocks feel this most because much of their value comes from distant payments. A Treasury still carries price risk if you sell before maturity and reinvestment risk when it matures, but it carries no business risk and no chance of a dividend cut.
Falling prices created these yields.
Cramer said VICI yields 7.93% and is down 18% year to date. He noted General Mills yields 7.3% after a 28% slide, including more than 7% in a single week.
Jim Cramer put UPS at 7.1% with a 5% decline for the year and Edison at 6.8% after a 26% drop in a month.
Monday’s closing prices show VICI down 13.14% this year, UPS down 0.4% and Edison down 26.65% over the past month, according to CNBC. Dividends barely moved. VICI raised its quarterly payout from $0.45 to $0.46, and General Mills has paid $0.61 for five straight quarters, so falling prices did most of the work.
Dividend Cuts Have Already Hit Household Names
Jim Cramer noted that Campbell’s cut its dividend by 36% and that Conagra yielded more than 10% before halving its payout. Whirlpool suspended its dividend entirely.
A yield far above the market often signals a coming cut, and the tells tend to repeat across sectors (24/7 Wall St. listed the seven warning signs in a free dividend trap guide). Payout coverage and free cash flow decide the outcome.
UPS produced $8.45 billion of operating cash flow in 2025 to fund $3.685 billion of capital spending and $5.398 billion of dividends. Its second-quarter GAAP EPS was just $0.71 after $1.17 billion in transformation costs. General Mills generated $297.8 million of operating cash flow last quarter against $330.5 million in dividends.
Edison’s utility faces over 30,000 Eaton Fire litigation claims, and management said its “triple B minus” rating leaves “nowhere to go in investment grade.”
Moderate Yields Backed by Rising Cash Flow Still Work
A moderate yield backed by growing free cash flow signals a business funding growth, while a yield inflated by a falling share price signals doubt about the payout.
Income investing still makes sense when you check coverage first and treat an unusually high yield as a question the company must answer.
These stocks recover most easily if long rates fall and stay down. The 10-year hit 3.97% in February, so the move can reverse.
Watch whether it holds below its one-year average of 4.36% for weeks. Company signals matter too, including General Mills reducing leverage toward its three-times net debt target and California wildfire legislation for Edison.
Are High-Yield Dividend Stocks a Buy?
General Mills trades near 12 times forward earnings, UPS near 12x, and Edison near 8x. Edison confirmed 2026 core EPS guidance of $5.90 to $6.20.
The bear case is that the safest competitor keeps paying more while these companies carry leverage, legal liability, or cash-flow gaps. That combination increases the risk premium investors demand.
The bear case carries more weight. General Mills, UPS, and Edison offer extra yield for growing risk. VICI is worth your research as the exception, since its 2026 AFFO guidance of $2.45 to $2.47 per share sits well above its $1.84 annualized dividend, although Caesars and MGM supply about 38% and 32% of rent. I wouldn’t buy stocks that have a yield close to or higher than the Treasury yield right now. A yield that high either competes with the rising risk-free rate or is falling, or both.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
