No. of Recommendations: 4
I researched a number of company's where the yield is substantial with a dividend being paid that's greater than the earnings p/shr. How can they pay a dividend more than they earn? Should I avoid these companies?

The dividend can be greater than earnings if there is a return-of-capital (RoC).

An exanmple: Atlas Energy Resources (ATN) their earnings is less than there paying out, but II profiled them as a stock to buy. Isn't there a risk that there divident will be cut being higher than their earnings?
Is this a good company?

Any comments.


ATN is a Master Limited Partnership (MLP). Let's just say that if you are using "earnings" as a basis of measure for MLPs, you don't understand MLPs.

I'm not an II subscriber, so I cannot comment on their analysis.
For an MLP, you need to understand things like Distributable Cash Flow, Reserve Life Index, Hedging, asset type/location/diversity, etc.
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