5 Dividend Stocks to Consider Selling Now

With interest rates in the basement and likely to stay there for some time, investors have, for good reason, flocked to dividend-paying stocks.

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With interest rates in the basement and likely to stay there for some time, investors have, for good reason, flocked to dividend-paying stocks. But demand has pushed up the prices of many popular payers to possibly unsustainable levels. These stocks could be vulnerable to steep declines.

People who can live off of their dividend income and can ignore share-price fluctuations may not have to worry much about a market reversal. After all, given enough time, the price of a good company will eventually recover. But investors who can’t stomach a downturn—even if it proves temporary—may want to lighten up on some overpriced dividend stocks.

We’ve identified five dividend payers that look overvalued and that you should consider unloading. Keep in mind that if you own these stocks in a taxable account, selling could generate capital gains, on which you might have to pay income taxes.

All prices and returns are through August 19. Price-earnings ratios are based on estimated earnings over the next four quarters.

Kathy Kristof
Contributing Editor, Kiplinger's Personal Finance
Kristof, editor of SideHusl.com (opens in new tab), is an award-winning financial journalist, who writes regularly for Kiplinger's Personal Finance and CBS MoneyWatch. She's the author of Investing 101, Taming the Tuition Tiger and Kathy Kristof's Complete Book of Dollars and Sense. But perhaps her biggest claim to fame is that she was once a Jeopardy question: Kathy Kristof replaced what famous personal finance columnist, who died in 1991? Answer: Sylvia Porter.