Shell and British American Tobacco Face Market Scrutiny Over Financial Health

Shell and British American Tobacco are currently facing market scrutiny. One report notes that a high dividend yield can result from either a high dividend or a low share price, which is common during a slowing economy where sales and profits are beginning to fall. This scrutiny often relates to the risk of companies cutting or eliminating dividends later.

Market scrutiny is tied to the risk that companies with high dividend yields may be experiencing shrinking margins or falling profits. Even companies with long records of dividend growth have faced setbacks when making decisions to strengthen their balance sheets over the longer term.