Investors assess a company’s dividend sustainability through the payout ratio. Adjusted-profit calculations are used in some industries to evaluate payout safety. A high ratio doesn’t always indicate risk; some high-yielding stocks have safe dividends. Kenvue, Enbridge, and Realty Income have ratios over 100%, raising concerns about payout sustainability.

Kenvue, spun off from Johnson & Johnson, offers a 5.5% dividend yield. Recent claims linking Tylenol to autism could impact Kenvue’s financials. Despite earnings per share exceeding dividend payouts, free cash flow barely covered dividends. The dividend’s sustainability hinges on the Tylenol controversy’s financial impact.

Enbridge, a Canadian pipeline company, provides a 5.9% yield. With a payout ratio of 130%, Enbridge evaluates dividends based on distributable cash flow. Management projects healthy cash flow to sustain dividends. Enbridge is a stable long-term investment with a consistently increasing dividend for 30 years.

Realty Income, a high-yield REIT, offers a 5.4% yield. Despite a high payout ratio, adjusted FFO shows dividend sustainability. Monthly dividend payments and consistent increases make Realty Income an attractive long-term investment. Investors should consider adjusted calculations when evaluating high-yielding dividend stocks.

Read more at Yahoo Finance: These 3 Dividend Stocks Yield More Than 5% and Have Payout Ratios Over 100%. Are Dividend Cuts Coming?