3 dividend stocks that disappointed in 2013

Halted and slashed payouts make these income issues ones to avoid next year.

By InvestorPlace Dec 19, 2013 2:22PM

Image: Gold Bars (© Stockbyte/SuperStock)By Jim Woods


It has been a very good year for the equity markets, and dividend stocks have been no exception.


Although the year-to-date performance of the S&P 500 Index at nearly 25% has surpassed the year-to-date performance of the benchmark dividend ETF, the iShares Select Dividend Index (DVY), many stalwart dividend plays have been putting smiles on income-oriented investors' faces.


Unfortunately, this story isn't about smiling faces.


This is about the dark side of the dividend story -- particularly companies that laid a serious egg in 2013. By laying an egg, I mean these dividend stocks either suspended or severely slashed their payouts this year. That means if you bought these companies thinking you'd get income, sorry. . . you're out of luck.


Here are a few dividend stocks that turned into big disappointments in 2013.


Nokia

Finnish mobile phone manufacturer Nokia (NOK) hung up on income investors in January, with the company dumping its dividend for the first time in more than two decades.

Nokia did manage to have a good year in terms of profits in 2013, and NOK stock has also performed very well, jumping more than 90% this year.


However, Nokia isn't the same company anymore, having dumped its handset business onto Microsoft (MSFT). And again, it's no longer a dividend play. (Microsoft owns and publishes Top Stocks, an MSN Money site.)


If you're looking for an income-producing dividend stock to fill the void, consider the classic pure plays AT&T (T) and Verizon (VZ).


Pitney Bowes

What do you do when you're essentially a print-oriented company trapped in a digital world?


If you're Pitney Bowes (PBI), you sacrifice shareholders by taking the knife to your dividend.


In late April, PBI cut its payout in half as the mail-and-document-services giant continued to struggle. Declining revenue and weaker demand for mail products meant shareholders were presented with a payout of 18.75 cents per share vs. the 37.5 cents that was delivered to their financial mailboxes before the April cut.


Including the initial dip following the company's announcement, PBI actually is up more than 30% since hacking away at its dividend. Nonetheless, I suspect the digital writing is on the wall here for Pitney Bowes. As such, if you still own PBI for the dividend, you might want to mark it "return to sender."


Gold-mining stocks

The final entries among the disappointing dividend stocks of 2013 all came from the gold mining sector, and as such, I didn’t want to pick on just one.


Given that 2013 was the first down year for gold in a very long time, it should come as no surprise that gold mining stocks suffered in sympathy. That suffering caused the biggest gold producer, Barrick Gold (ABX), to cut its payout, which it announced on Aug. 1. ABX also took a writedown in the previous quarter, citing slumping bullion prices.


A day earlier, Kinross Gold (KGC) suspended its semiannual dividend, and it also announced a delay in its decision on future expansion of the mill at the Tasiast mine in Africa. Finally, about a week later, AngloGold Ashanti (AU) -- the third-largest producer of the yellow metal -- suspended its dividend on poor earnings due to declining gold prices.


With the luster now off on gold, the dividend income from mining stocks also is dead.


I say scrap this dividend sector in 2014 until the shine returns, as well as these other two dividend stocks that did investors wrong.


More From InvestorPlace

As of this writing, Jim Woods did not hold a position in any of the aforementioned securities.

VIDEO ON MSN MONEY

1Comment
Dec 31, 2013 6:46PM
avatar
After buying NOK at the end of May at 3.42, I'm not sure "disappointing" is the right description, but whatever.  A matter of perspective and timing, I suppose.  It wasn't a dividend stock, however, which was Mr. Wood's point. It's my biggest gainer of 2013, obviously.   
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

POLL

Apple has a new entry in the cell phone wars. But how often do you buy a new phone?

Thanks for being one of the first people to vote. Results will be available soon. Check for results

  1.  
    4 %
    As soon as one comes out. I'm an early adopter.
    321 votes
  2.  
    3 %
    Every year. I need to keep up.
    246 votes
  3.  
    55 %
    Every two to three years, when my contract allows.
    4,578 votes
  4.  
    38 %
    If it's not broken, who needs a new phone?
    3,178 votes

Total Responses: 8,323
Not scientifically valid. Results are updated every minute.