Could these superior dividends of the United Kingdom be at risk?

My investment style has evolved for decades, but mostly I look for cheap actions and thick dividend yields. But the problem of being a bargain hunter is that gifts are difficult to find.

Even so, I keep sifting the Ftse 100hunting of undervalued actions. I particularly enjoy cheap footsie actions, since I see that the United Kingdom market is undervalued in historical and geographical terms. In addition, almost all members of FTSE 100 pay dividends to shareholders.

Dividends can be inciosos

After companies pay dividends, their cash batteries are smaller. And repeatedly paying excessively generous dividends can weaken the balance of a company. This can cause solvency problems in some companies, but companies generally respond by reducing future dividends.

As future dividends are not guaranteed, they can be eliminated in the short term. Therefore, I pay a lot of attention to dividend records, looking for signs of possible difficulties ahead.

In addition, very high dividend yields can warn about future problems. In particular, history shows that cash yields of two digits rarely last. The prices of the shares increase and the yields fall, or the dividends are reduced, producing similar results.

The highest yields of the FTSE 100

For example, here are the five highest actions of FTSE 100:

*All figures from March 29

Disclosure: My wife and I have actions in four of these five 'Dynamos de Dividendos' in our family portfolio, excluding Taylor Wimpey. We buy these actions for your bumper dividend yields. For now, we reinvirt this effective in even more actions, which increases our future yields.

Looking at the first three previous actions, I see that their dividend payments are quite safe. These three asset administrators generate billions of surplus capital of their operational businesses, which allows them to comfortably pay the projected cash returns. On the other hand, one of these actions provides an important lesson of dividend dangers.

Vodafone volatile

For me, Vodafone group (LSE: VOD) The actions became a classic 'trap of value'. We buy these high performance actions in December 2022, paying 90.2p per share. In two months, the price of the action jumped above 102p, but has been downhill since then. More than a year, this action has increased by 5.8%, but has decreased by 37.7% in five years.

A problem for Vodafone is that their income stagnates or are slowly stagnating in their main European markets, including Germany and the United Kingdom. Unfortunately, strong growth in emerging markets has failed to compensate for the decrease in group long -term profits. At the top of the Dotcom bubble that exploded in 2000, Vodafone was the company that appears in Europe. Today, it is worth a fraction so much.

A big problem for Vodafone's shareholders arrived in May 2024, when the company announced that its annual dividend would be reduced by half from 2025 onwards. Having had € 0.09 (7.5p) per year for years, the payment of 2025 will be submerged by 50%. It is not surprising that the actions have fallen from the loss of this income.

Despite this setback of dividends, I remain a fan of the CEO Margherita della Valle, who is changing this oil company through the sales of non -basic assets and links with other telecommunications players. Therefore, I will keep our Vodafone holding for now!