Don’t be Fooled by this Double Digit Dividend Aristocrat: Pitney Bowes Inc. (PBI)

What is truly disturbing is the staggering debt load of Pitney Bowes.  The debt-to-equity ratio is 29.53.  That means it required almost $30 in debt to producer just one dollar in equity.

Unsurprisingly, there is a high short float of 30.71% for Pitney Bowes.  A short float of 5% is considered to be troubling for a company.  What makes this short float even more compelling as an indicator is that those holding a short position do not collect the dividend, even though they pay for it when going short on a stock.

Pitney Bowes does appeal to value investors with a price-to-earnings ratio of just 6.71 and a price-to-sales ratio of 0.48 (although it appears to be a classic value trap with falling sales and EPS).  But income investors should not succumb to the temptation of this double digit dividend.  There just is not the earnings stream to support such a huge payout to the shareholders.

The article Don’t be Fooled by this Double Digit Dividend Aristocrat originally appeared on and is written by Jonathan Yates.

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