The Volkswagen Lesson for Dividends

Volkswagen AG’s (VLKAY) current 3.9% yield in U.S. equity markets can teach dividend-oriented investors two important lessons.

Let’s start with the main one: not all high-yielding dividend stocks are created equal. Maybe because it’s human nature to categorize and stereotype, we tend to think of dividend stocks as solid, large companies that are usually involved in manufacturing and/or distributing a tangible product or a core service. If names like General Electric (GE ), Duke Power (DUK ) or ExxonMobil (XOM ), thus, come to mind when you think of companies that pay healthy dividends, it’s no wonder.