Our pans fall into two categories: companies with poor prospects and those with better prospects that trade at absurdly high prices. If you own any of these five stocks, consider dumping it, or at least paring back, especially if doing so won't result in a taxable gain.
-- CenturyLink (symbol CTL, $31). Profits seem to be rising at this telecom company. But take out one-time items, and operating income and cash flow are down from a year ago. Moreover, analysts expect virtually no profit growth over the next few years. What's holding up the stock price is a fat $2.16-per-share annual dividend, which gives the stock a 6.4-percent yield. But CenturyLink cut the payout in 2013, and Brad Lamensdorf, co-manager of the Ranger Equity Bear ETF, expects it to do so again within the next year.
Diebold (DBD, $34). A juicy, $1.15-per-share dividend is also propping up shares of this maker of automated teller machines. Diebold has a long history of yearly dividend hikes, but those increases have gotten smaller as the company's finances have gotten tighter. Declining sales, a major restructuring and the recent departure of the company's chief financial officer all raise red flags. Finally, the stock, at 18 times projected earnings, isn't cheap.
-- Dominion Resources (D, $65). Dominion owns regulated electric utilities in Virginia and North Carolina, regulated natural gas utilities in Ohio and West Virginia, as well as various unregulated units. Analysts expect earnings to grow at a 7 percent annual clip over the next few years. That's not terrible, but the stock sells for a lofty 18 times estimated year-ahead earnings. Also troubling is that Dominion has been borrowing money and issuing stock to support its $2.25-per-share annual dividend. The company can't keep making those generous payments forever.
-- Tesla Motors (TSLA, $126). Tesla makes great cars. But Tesla's stock, which has zoomed ahead since going public three years ago, is priced for a perfect future; it sells for 84 times estimated earnings for the next four quarters. Any stumble will deliver a nasty shock to Tesla bulls.
-- 3D Systems (DDD, $75). Like Tesla, 3D Systems is a hot stock in a hot industry. Shares of the maker of three-dimensional printers have quadrupled over the past two-and-a-half years. Although 3D's printers could revolutionize manufacturing, the company needs to drum up interest among consumers to support a stock that sells for 59 times projected year-ahead earnings. That hasn't happened, Lamensdorf says. The printers hit Staples shelves last summer, but his checks indicate that few have sold, apparently because they're expensive and because consumer applications aren't obvious.
(Kathy Kristof is a contributing editor to Kiplinger's Personal Finance magazine. Send your questions and comments to email@example.com. And for more on this and similar money topics, visit http://www.Kiplinger.com.)
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