My Biggest Dividend Stock Mistakes in 2016

In 2016, we had many victories in investing.  We are earning a lot of dividends, increased our passive income, and had stock price appreciation.  But not everything was rosy.  Here are my biggest dividend stock mistakes in 2016.

My Biggest Dividend Stock Mistakes in 2016

Was is a Mistake?

What is success and what is a mistake.  Our goal is to buy dividend stocks with increasing dividends.  So, our mistakes will be defined as any stock getting a dividend cut.

Why not use the word failure?  “I have not failed. I’ve just found 10,000 ways that won’t work” (Thomas Edison). Failure is a state of mind.  I have not made any failures.  I just made mistakes that I need to improve upon.

National Oilwell Varco (NOV)

We purchased National Oilwell Varco (NOV) because of weakness in oil prices.  We guess that a supplier to the oil industry could outlast the weakness.  After all, oil companies still need to spend money to keep their oil equipment working.  They had a nice dividend and we knew the dividend was high risk, which we knowingly accepted.  Turns out the high-risk dividend pick was wrong.  They announced an 89% dividend cut.  We sold all of our shares and moved on. Read our 1st Dividend Stock Sale of NOV.

Williams Companies (WMB)

Williams Companies (WMB) had a 12.8% dividend yield.  We assumed the dividend was safe with cashflow. We guessed that the merger between Williams Companies (WMB) and Energy Transfer (ETE) was not going to happen, protecting the dividend.  However, before the merger was even decided, I read that the dividend would be cut whether the merger went through or not.  Because a dividend cut was going to happen either way, we sold all of our shares.  This was a high-risk dividend stock with a high dividend yield, and we got this energy company wrong also.  Here is the WMB sale we did.


HCP (HCP) was a high dividend yield Dividend Aristocrat REIT.  We like Aristocrats, REITs, and high yield dividend stocks.  Seemed like a great combination.  Plus, they were in health care, and with the trend of an aging population, this felt like a good trend for the future.  HCP (HCP) was doing a spinoff of QCP to remove the worst assets they had from their balance sheets.  They said the spinoff could make decisions to fix the asset that would be unavailable to the bigger HCP (HCP) company.  With the spinoff, they cut the dividend.  I had to sell HCP (HCP) for other personnel reasons before I found out about this dividend cut out.  However, they still cut their dividend making me wrong.  This means that they will/should lose their dividend aristocrats status.

Biggest Dividend Stock Mistakes in 2016

What did we learn from our mistakes?  Oil crashing was one of the big part of the market correction.  We should have guessed that the 2 oil stocks that the dividend cuts were likely, and we did recognize that at the time.  Many other oil stocks cut their dividend, but my stocks were just slower in doing it. Although, the safer larger oil companies like Exxon Mobil (XOM) did not cut.  But they were high risk, high reward.  With HCP, with them being a dividend aristocrat REIT, this would have been hard to guess.

We are glad we are keeping track of our stock trades on this site.  Now, I have a fantastic record of my dividend stocks picks.  I can see what I did good and what I did wrong.

Overall, even with this couple mistake, I had a lot of successes.  My new learning is to be extra careful of the sector that is causing the market decline.  Oil was crashing, and oil companies were forced to cut dividends.  We are glad we sold this the stocks when we did.  “Your first loss is your best loss.” (Jim Cramer)  We sold our losing dividend stocks and focused on finding more winners.

What was your biggest dividend stock mistakes in 2016?   Have you reviewed your investments so you can improve?  Please feel free to share in the comment section below.


Discloser: ETE, HCP, NOV, WMB, XOM – We do not own shares.


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17 thoughts on “My Biggest Dividend Stock Mistakes in 2016

  1. Thanks for sharing your biggest mistakes not failures. I am still new to investing so I am sure to make some mistakes myself, still learning. Cheers

      1. As the saying goes, once you stop learning you die. All the best, sorry don’t mean to sound so grim. Cheers

  2. Viacom was my only mistake in this regard for 2016. The ratios looked good, and it appeared significantly undervalued. Unfortunately some of the capital appreciation wasn’t sustained and they cut the dividend by 50%! I sold my position and reallocated the proceeds to TGT at the time.

  3. Thanks for sharing. For me it wasn’t a dividend cut. But I made the rookie mistake of chasing yield with Frontier Communications. Now I’m just hoping for a little recovery before I exit.

    1. With Frontier Communications (FTR) being in the S&P 500, I have reviewed it a bunch of times and almost bought it a couple times. Their is a few high yield stocks that I like and own. Hope your new investments are working out for you.

  4. Thanks for sharing. Every investor will have those mistakes, but it’s smart to turn it into a learning opportunity going forward. I’ve been bit by the oil/ energy cuts as well. Seems like most have. HCP got me too but I don’t consider it a mistake at all. They were a different story with their cut and making a spin-off. Holders of the company were still compensated with shares of the spin-off to make up for the decrease in share price. And even now, HCP’s dividend yield is over 4%. Makes sense they had to cut it, due to losing part of their company. There would be no way to maintain that level of dividend. I currently still hold HCP shares and plan on keeping them long term unless they cut their dividend again.

    1. If I didn’t liquidate my portfolio, I may have kept HCP. But since I started over, I choice another high yield company that was similar, SNH. Hopefully the switch will turn out good.

    1. Currently, my investing rules say to review a company when their is a dividend cut and to consider selling. So far, I have sold everytime, but this dividend portfolio is less than a year and a half old. However, it is a case by case decision and I may decide not to sell with a different company.

  5. Thanks for sharing DM. I’m only investing in four stocks right now in my portfolio, and one of those stocks is actually XOM. So, I didn’t make a mistake as defined in your post. However, I felt I could have purchased more shares in the companies that I own rather than waste my money on other things. It’s a never ending learning process trying to balance life with investing.

    Good post.

    1. Having more money to invest is always good. The balance of enjoying life and saving for the future is a tough balance. How much I save changes over time. On vacation months, I save less. Months with not to much going on, like February, I save more. Being flexible with decisions has helped me a lot.

  6. Hmmm, I’m actually considering adding HCP to my dividend portfolio. Just read an article on about the fact that you should consider the reduction of HCP dividend to that of a stock split. I don’t want to violate any rules, so I’m not posting the article, but it may appear that HCP was not really a mistake. I suppose it’s a matter of perspective.

  7. I think this is the great article i learned lot of things from your mistakes. But you have done a great job by wrote this article. I think some of my friends need to see this and It’s worth able to share it.

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