Dividend Cut Risk Looms for Several Stocks, Wolfe Research Warns

Wolfe Research has identified a number of companies that may slash their dividends in the near future. Income-focused investors could see a tangible impact if these firms reduce payouts, which would lower the cash stream available for spending or reinvestment.

Whirlpool announced in May that it would pause its dividend to prioritize debt reduction amid a “recession‑level industry decline.” Flowers Foods and LyondellBasell Industries also cut their dividends earlier this year. Companies under financial strain often have to decrease or suspend earnings distributions to preserve capital.

Wolfe’s chief investment strategist, Chris Senyek, targeted stocks with yields above 3.5% and at least one of the following characteristics: a payout ratio over 80%, dividend or free cash flow to equity coverage above 80%, or leverage exceeding 3.5‑fold. The resulting list includes several well‑known names.

Nike—yielding 3.79%—has seen its dividend at risk after a 32% decline in share price this year. Although the company beat earnings and revenue estimates in its fiscal fourth quarter, declining sales in China have dampened growth prospects. Analysts generallyවේפרק listed Nike with an overweight rating and an average upside of 17% to the price target.

PepsiCo, with a 4.14% yield, appears on the screen following an increase in its payout in June. The beverage and snack giant exceeded expectations in its first‑quarter earnings. With an average analyst rating of overweight, PepsiCo’s upside is about 16% to the target price. The company’s share price has seen only modest gains year‑to‑date.

Blackstone’s 4.01% yield has attracted scrutiny after the firm restricted withdrawals from Blackstone Private Credit (BCRED) in response to a surge in redemption requests. This liquidity concern has contributed to a roughly 20% decline in Blackstone’s share price this year. Analysts continue to give Blackstone an overweight rating with a 15% upside.

United Parcel Service (UPS) stands out with a 5.95% yield and a 11% year‑to‑date gain. The logistics company is implementing a turnaround plan that targets $3 billion in cost\Bundle savings by 2026. Analysts rate UPS as overweight, with a modest 3% upside. The company is set to release its Q2 earnings at the end of the month.

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