"Overcrowded" yield stocks begin to sell off

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Telstra stands out among yield stocks as a victim of the "double-whammy" of a shift in sentiment and the beginning of bad news cycle, says Rudi Filapek-Vandyck from FNArena. While he thinks the sentiment shift is happening right across the yield theme, Telstra analysts have changed their dividend forecasts from rising dividends to flat dividends. Worse yet, he expects falling profits to put pressure on the dividends in coming years. "As analysts see it now, the gap between what they actually generate out of their daily operations and what they pay out to shareholders, that gap is going to widen. By 2019, on forecasts, they're be making something like 21c, if the forecasts are correct, and they keep their dividends, they'll be paying out 31c. That's a big difference." In this video, he expands on Telstra and discusses his view on REITs. (VIEW LINK)


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