Safe Dividend Investing
In 2000, I lost $300,000 in mutual funds that an investment advisor had put my lifesavings into.... I lost it because I had entrusted it to an industry that does not educate investors nor encourage them to look closely at what that industry is doing with their money..... I set out to find a better, safer way to invest..... My podcasts relate to what I learned in creating a generous, reliable income and in growing my wealth.... A few of the more important lessons I learned and explore are:.... (1) It is critical that you become a self-directed investor.....(2) If you can not easily measure the risk and potential in an investment, then do not invest in it. This excludes from your portfolio bundled investment devices, like mutual funds, ETFs and Index funds,..... (3) Financially strong companies who have paid “good dividends” for decades will continue to stay strong and continue to pay good dividends because it is both part of their "character" and in their executives selfish interest.....(4) Diversification is critical. Investing equally in the best 20 strong dividend stocks is the ideal.....A portfolio of 20 limits your risk in any one stock to 5% of your wealth..... No matter how strong you think a stock is, do not fall in love with it..... I have lived very well off my steady dividend income for 18 years, through two market crashes and one pandemic. I have watched my portfolio’s capital more than triple from where I started, despite taking out a generous dividend income every year to live on... In charts, for my second investment book,(Safer Better Dividend Investing), I spent months scoring all 628 dividend stocks paying dividends of 6% or greater traded on the TSX, NYSE and the NASDAQ. I discovered dozens of stocks that can provide not only a generous dividend income but outstanding capital growth.....Financial independence is realizable for careful, patient, dividend investors.
Safe Dividend Investing
Podcast 256 - WOULD A STOCK WITH A 20% DIVIDEND YIELD BE SAFE?
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Welcome to Safe Dividend Investing’s Podcast # 256, on January 3rd of 2026. Happy New Year!
My name is Ian Duncan MacDonald, and I am an author of six investment books. Today my seventh investment book, Achieving Financial Independence Safely - 200 NYSE Stocks Analyzed and Scored" became available on Amazon. You can easily find it by searching in Amazon or Google for "Ian Duncan MacDonald books". It is my only book in the display with a green cover. Until February 10th, it is available at a discounted price.
In 2025 the book required hundreds of hours of my time. It feels good to now have the freedom to investigate investment questions I have wondered about. For example, how many U.S. stocks pay dividend yields over 20% and would I consider adding any of them to my portfolio?
My research identified 27 stocks out of thousands traded in the USA who pay a dividend over 20%. One paid an incredible 400% dividend. I also immediately identified one that appears in my latest book. It is one that I might have consider for my portfolio. In this week's analysis of these two stocks may get some insights in the consideration of high dividend stocks.
My books are not get-rich-quick books. They are about taking a little time to carefully seek out financially strong companies with long histories of paying ever rising high dividends accompanied by rising share prices. Diversification, persistence and patience win out in investing. The objective is achieving financial independence for the rest of your life.
Please, visit my website www.informus.ca if you wish to learn more about me and my writing.
Ian Duncan MacDonald
Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of Informus Inc
2 Vista Humber Drive
Toronto, Ontario
Canada, M9P 3R7
Toronto Telephone - 416-245-4994
New York Telephone - 929-800-2397
imacd@informus.ca
PODCAST 256
SAFE DIVIDEND INVESTING
Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast # 256, on January 3rd of 2026. Happy New Year!
My name is Ian Duncan MacDonald, and I am an author of seven investment books. My latest book “Achieving Financial Independence Safely - 200 NYSE exchange Stocks Analyzed and Scored” is now available for delivery from Amazon. You can find it listed with my other six investment books by doing a search in Amazon or Google by entering "Ian Duncan MacDonald books". It is my only book with a green cover.
This new 347 page book required hundreds of hours of my time over the last six months. It will help investors quickly and easily select shares of financially strong companies paying high dividends. I found it interesting that very few of the shares listed in the new book appeared in my previous books. By investing the derived dividend income, plus with the normal share price increases of strong stocks, investors can achieve financial independence. With independence comes lifelong freedom and security.
It feels good to now have the freedom to investigate investment questions I have wondered about. For example, how many U.S. stocks pay dividend yields over 20% and would I consider adding any of them to my portfolio.
Using the Yahoo financial research database. I identified 27 stocks that were projected to pay dividend yields greater than 20%. Much to my surprise I immediately recognized among them one that appears in my latest book. It is an Israeli company, ZIM Integrated Shipping Services Ltd that is traded on the New York Stock Exchange. On the day I entered it into my book it was trading at $19.70, a share. This was down from $55.89 it had been trading at in 2021. ZIM’s book value of $33.52 was significantly higher than that current share price. This made it look like a bargain. The number of shares traded exceeded three million. ZIM's price to earnings ratio of 0.9x and its operating margin of 28.65% were both good.
The IDM score of 49 for ZIM while not great was high enough that I could consider it for my portfolio. However, what would rule it out my acquiring it is that it had only been listed on the NYSE since 2021. I like to see at least a decade of rising share prices and dividend yields.
Its high dividend yield of 21.53% stopped ZIM from scoring over 50. I usually avoid stocks scoring under 50. If Zim had been paying a lower dividend yield like10.49% it would have scored 58.
The IDM scoring system reflects my concern about companies who pay very high dividends. Usually, a very high dividend percentage is an indication that a company has a problem and is using its high dividend to blind speculative investors from looking more closely at the company’s financial condition. Such a high dividend should be like a flashing red light begging for closer analysis.
When I looked closely at the stock that topped the list of the highest dividend yield payers, that stock was an excellent example of all my concerns about extremely high dividend payers. The company was FAT Brands Inc. Their stock symbol is FAT.
It is a California company traded on the NASDAQ showing a remarkable forward dividend yield percent of 400.10%. This is a long way from the 5% to 9% that I look for in a safe stock to acquire.
FAT's share price was 31 cents. It's operating margin was minus 37.72%. The price-to-earnings ratio was 0.0x. Its book value was minus $26.41a share.
These numbers are at the extreme negative end of what I would expect from a stock with such a high dividend yield percent. Interestingly, the stock traded 182,723 shares on December 31st which if you put it into perspective meant speculators gambled a blistering $56,644.13 in the shares of this company. Much to my surprise it even had a single analyst projection. This professional predicted that the share price target would climb to $10 a share.
When I scored FAT it scored a very thin 13. Out of thousands of stocks I have scored I can only remember one of two that had ever scored lower than this. I believe this score has more credibility than the analyst who sees it climbing to $10 a share.
The high point of this stock was reached in 2021 when its share price climbed to $6.15. It even paid a dividend of 7 cents per share. Since then, the last time it paid a dividend was in November of 2024 when it paid 8 cents per share. Within two years FAT collapsed. What has brought so much grief to the investors who bought shares in what they thought was a solid company.
FAT describes itself as a global franchising company with 2,300 quick service, casual dining restaurants affiliated with it. I recognized one of their 18 restaurant brands. I have eaten in their Ponderosa steak houses. However, I was not familiar with many of FAT’s brands like. Bonanza, Fazoli’s, Fat Burgers and Johnny Rocket’s.
When you dig into it, you learn that the founder of the company, Andrew Wiederhorn, stepped down from the chief executive position in 2024. A short time later the Security Exchange Commission and the Department of Justice commenced a legal action against FAT for self-dealing and misuse of company funds. These regulatory agencies were attempting to regain $47 million dollars that was paid by FAT to the Wiederhorn family. In October of 2025 an offer was made to settle that legal $47million dollar action for $10 million dollars.
In the meantime, UMB Bank representing shareholders and unsecured creditors, issued an Acceleration Notice demanding 1.3 billion dollars to repay FAT’s debts. FAT had missed loan payments in November of 2025. A short time later FAT filed a notice with the Security Exchange Commission that they could seek a Chapter 11 bankruptcy for restructuring since they were unable to pay the 1.3 billion dollars
In a display of FAT’s largest shareholders, it was surprising to see so many mutual fund companies appearing. it appears that these funds may be about to lose millions of dollars. You might wonder if this loss will impact holders of the funds’ units. If FAT is the sort of company that funds invest in, it makes you wonder about the wisdom of allowing professional fund managers to manage your money.
What I did not read anywhere is what impact FAT’s problems have had upon those 2,300 franchisees of their restaurants. Often franchisees are small business owners who employ thousands. They have invested their life savings in a franchise because they bought the argument that they would make more money as owner’s of a franchise instead of running an independent business. Now they must be wondering to what extent their future is in jeopardy.
Fat’s problems are being blamed on overly aggressive acquisition growth. I suspect it would also have to do with the founder stepping down as chief executive in 2024.
The next time you are attracted to a stock because of a high dividend yield percent, hopefully you will remember this Podcast and take just few minutes, not hours or days, to do some basis research on the stock. The research tools are immediately available, free and easy to use. Those who buy my books have free access to the IDM stock scoring software.
Your objective is to invest in experienced, financially strong companies that will generate a safe income and grow your portfolio for the rest of your life?
That’s all for this week.