4 High-Yield Dividends That Could Be Next on the Chopping Block
A flashy dividend yield can mask serious cracks in a company's finances, and four well-known names are showing the same warning signs that preceded Whirlpool's sudden payout suspension earlier this year.
On a late-September episode of Mad Money, Jim Cramer pointed to Whirlpool (NYSE:WHR | WHR Price Prediction). He noted that the appliance maker had “struggled for years amid a tough housing market” and then suspended its dividend entirely in May. His warning: “Every time something like this happens, it calls into question the safety of high-yielding dividend plays and reaching for yield, which is something I never like to do.” A big yield means little unless the company can keep the payout. The four names below all show warning signs.
The simple test: a dividend gets shaky when earnings and free cash flow (operating cash minus capital spending) can’t cover it, so the company has to lean on debt, cash reserves, or asset sales to keep paying.
Conagra Brands (CAG): Paying Out While Losing Money
Conagra Brands (NYSE:CAG) shows an 8.73% yield. Most of that comes from a falling share price. The stock is down 13.29% over the past year and 42.48% over five years.
The biggest problem is the earnings gap. Conagra posted EPS of -$3.98 over the trailing twelve months but paid out $1.225 in dividends over that period. The company has already cut once. The quarterly payout dropped from $0.35 to $0.175 starting with the July 30 ex-dividend date. At the new $0.70 annualized rate, the forward yield is about 4.7%, so the 8.73% headline exaggerates what new buyers collect, repeating Cramer’s yield warning. Cash flow stays weak after the cut. In fiscal first-quarter 2027, operating cash flow was -$4.2 million and free cash flow was -$127.9 million, while dividends totaled $167.5 million. Revenue slipped 1.4%, and net leverage stands near 3.83x.
The optimistic view starts with guidance. Adjusted EPS guidance of $1.40 to $1.50 covers the reduced payout well. What to watch: whether operating cash flow turns positive and leverage stays at or below the ~4.0x year-end target.
UPS (UPS): A Dividend Bigger Than Its Earnings
United Parcel Service (NYSE:UPS) yields 6.59% on an annual payout of $6.56. The quarterly dividend has held at $1.64 since early 2025. Even after a 23.84% gain over the past year, the shares are still down 37.21% over five years.
UPS earned $5.38 per share over the trailing year, translating to a payout ratio of about 122%. Free cash flow is just as tight. First-quarter free cash flow of $1.280 billion fell short of the $1.352 billion paid in dividends. Cash dropped from $5.887 billion to $4.653 billion in six months, second-quarter operating income fell 48.96%, and interest expense rose 14.3%. Keeping a payout flat through that much stress is a red flag.
Full-year adjusted EPS guidance of about $7.22 would cover the dividend if UPS hits it. What to watch: the quarterly report due October 27 before the open is the dividend’s next test. Compare year-to-date free cash flow against the roughly $5.4 billion annual dividend bill.
LyondellBasell (LYB): One Cut Already, Propped Up by a Supply Shock
LyondellBasell Industries (NYSE:LYB) shows a 6.51% yield, and the stock is up 58.55% year to date.
The earnings side is weak. LyondellBasell posted EPS of -$0.86 over the trailing year and still paid dividends. It has already cut the quarterly rate from $1.37 to $0.69. On the forward $2.76 rate, the yield is about 4.2%. In 2025, operating cash flow of $2.262 billion had to fund $1.878 billion in capex and $1.764 billion in dividends, which it couldn’t cover. First-quarter 2026 operating cash flow was -$269 million.
Second-quarter EPS of $4.30 rode on Middle East supply disruption: EBITDA excluding items reached $2.13 billion, up from $715 million a year earlier. Management lists maintaining the dividend as a priority. What to watch: petrochemical margins as the disruption fades, and whether the Cash Improvement Plan saves $500 million by year-end.
Pfizer (PFE): Thin Earnings Behind a Steady Payout
Pfizer (NYSE:PFE) yields 5.76% on a $1.72 annual dividend, which has held at $0.43 a quarter since 2025.
Trailing EPS of $0.76 puts the GAAP payout ratio near 226%. The second quarter brought GAAP net income of -$248 million, driven by a $3.8 billion IPR&D impairment and $867 million in legal charges. Paxlovid sales fell 95%, net debt-to-EBITDA is 3.01, and return on invested capital is -1.29%.
The contrast comes from Jim Cramer, who said on Mad Money on July 7: “They do have earnings growth problems… The dividend is safe at 7%.” That 7% yield was his number back in July. The shares have rallied since, and the yield is now 5.76%. Adjusted EPS guidance of $2.80 to $3.00 covers the payout. What to watch: whether GAAP earnings recover as patent losses increase, including $1.1 billion of expected 2026 generic erosion.
Read the Yield Last
When a dividend gets cut, the stock typically drops with it so that yield-chasers can lose income and principal at once. Start with coverage: earnings, free cash flow, and debt. Look at the yield only after that. A high yield on its own should give investors pause (we laid out seven such red flags in a free dividend trap guide if you want the full checklist).
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
