Don’t Touch These Well-Loved Brands

Over the weekend, I sat down to update my watchlist. I’m always on the lookout for new stock ideas and go through my favorite stock screeners at least once a month. I wanted to have an updated watchlist as earnings season gets underway.

This is the week that banks kick off the fourth-quarter and full-year earnings reporting for 2025. It’s also when most management teams disclose their expectations for the upcoming year. It is the first big data dump of the year, and I will closely watch how overall investor sentiment reacts.

I’m especially curious with the CNN Fear & Greed Index in greed territory after months of fear.

One thing I look for with watchlist companies are dividend stocks that have seen large share price slides for no good reason. I’ll screen for dividend yields between 4.5-20% and then sort by one-year price change. This gives me a wide universe to examine.

I would normally add a screen for the payout ratio. We know that a payout ratio above 100 is a sign the dividend could be at risk.

I didn’t use a payout ratio filter because I wanted a larger list of companies to consider. Unfortunately, I didn’t find many new names to add to my watchlist.

I did, however, find some companies that might look like a good fit at first… but the numbers tell another story.

Dividend Don’ts for 2026

Dividend payers tend to be big, boring brands that people buy every day. Loyal customers create reliable revenue that can support dividend payments for many years into the future.

My expanded list of prospects included a few companies with a good consumer story, but I don’t think the dividends are going to survive.

1. Camping World Holdings (CWH) was an exciting stock during COVID. It rocketed 77% in 2020 as the popularity of the RV lifestyle exploded. At the end of that year, CWH paid a $0.91special dividend on top of the $0.09 regular quarterly dividend.

The share price momentum continued into 2021, and the dividend increases stretched until the end of 2023 hitting $0.63 per quarter.

But it’s been straight downhill since, with shares crashing 46.8% in the past year. The company has struggled to improve revenue and net leverage. It brags about outperforming the rest of the RV industry, but that’s not good enough.

The dividend was cut in September 2023, but its payout ratio remains over 100%. Frankly, I think another cut is on the horizon back to its pre-COVID payment of just $0.08.

2. Flowers Foods Inc. (FLO) is a giant in the bread aisle. It’s the parent company of Wonder Bread, Nature’s Own, Dave’s Killer Bread, TastyKake, Canyon Bakehouse, and many others. These are staples on lots of shoppers grocery lists across the US, but we know the center aisles have struggled over the last few years.

Shares are down 43% over the past year due to margin pressure. Its trailing twelve-month payout ratio is 106%, which isn’t great, and I think the 2025 final number will be even worse. The real issue is management will probably hold off any cut to the dividend as FLO has raised its dividend for the past 23 years.

3. The Wendy’s Company (WEN) is another brand that looks like it should be doing well. There seems to be one at every highway exit with a line to get a burger. But in its most recent quarter, same store sales were down 4.7% and global sales were down 2.6% year over year.

Shares have plunged 43% in the past twelve months.

In October, the company launched “Project Fresh,” a strategic plan to drive growth and enhance value creation. The plan includes brand revitalization and closing an additional 300 stores in 2026. So, there could be some light at the end of the tunnel for Wendy’s, but its recovery is just getting started.

Although I was looking for some new companies to add to my watchlist, finding stocks to avoid is just as useful. If any of these stocks pop up on your radar, you’ll want to take a closer look and make sure you know the risk to those dividends.

For more income, now and in the future,

Kelly Green