7 Dividend Stocks Retirees Might Want to Avoid Owning

Dividend-paying stocks are often favored by retirees seeking steady income, but some may not be great choices for seniors, at least right now.

By carefully selecting your investments, you can work to maximize your retirement savings and build your wealth. With that in mind, here are seven stocks you might want to avoid.

Editor's note: All figures are from October 2025.

Dividend stocks include companies that return a portion of their earnings to shareholders, typically on a quarterly basis.

These payments can provide a consistent income stream, which is particularly appealing to retirees. Keep in mind that high dividend yields can sometimes be a red flag, indicating potential financial instability or declining stock prices.

It's essential to assess the company's fundamentals to ensure the dividend is sustainable. Even if it is, that doesn't necessarily mean you should invest in that stock. If you are trying to get ahead financially, talking to a financial advisor might give you insights into which dividend stocks are right for you.

Here are some dividend stocks that might not be the best choices right now. 

Franklin Resources is a large investment manager. It offers an annual dividend of $1.28 per share, yielding approximately 5.47%.

While the company has a history of increasing dividends for 45 consecutive years, its payout ratio is concerning. Currently, it pays out 244.35% of its earnings and 46.81% of its cash flow as dividends. Some experts have suggested that may not be sustainable in the long term.

Retirees should be cautious, as overextended payout ratios can lead to dividend cuts, affecting income streams.

Pfizer has been around for nearly two centuries and is one of the world's best-known pharmaceutical companies.

The company offers $1.72 annual dividend per share and a yield of 6.70%. It pays out 90.28% of its earnings and 77.52% of its cash flow as dividends.

Experts, on the other hand, have suggested that Pfizer's large dividend yield might not be sustainable. In the past, it has cut its dividend at least once.

Medical Properties Trust is a real estate investment trust company that focuses on the health care sector. It has an annual dividend of $0.32 per share, with a yield of 5.94%.

In the past, the company reduced its dividend twice after a tenant (a chain of hospitals) declared bankruptcy. For that reason, retirees might want to pause before buying the stock.

3M Co. is an American multinational conglomerate. It offers an annual dividend of $2.92 per share and a yield of 1.87%. The company's dividend payout ratio stands at 40.53% of earnings and 29.73% of cash flow.

For more than 60 years, 3M increased its dividend payments. That made it an ideal stock for retirees who counted on a steady stream of growing dividends.

In 2024, the company cut its dividend due to falling cash flows, which made its dividend unsustainable. Some experts now believe 3M is a good dividend bet going forward, but retirees might want to take a wait-and-see approach for now.

AT&T is a multinational telecommunications holding company. It pays an annual dividend of $1.11 per share, yielding around 4.23%. The company's dividend payout ratio stands at 68.10% of earnings and 41.84% of cash flow.

While AT&T has a long-standing reputation for dividend payments, experts note the company has had a history of lackluster earnings growth. That may not bode well for the future.

Altria is one of the world's biggest producers of tobacco products. It offers a high annual dividend of $4.08 per share, with a yield of 6.24%. The company's dividend payout ratio stands at 79.68% of earnings and 78.82% of cash flow.

Altria's reliance on traditional tobacco products poses long-term risks. Changing consumer preferences and regulatory pressures could impact Altria's revenue streams.

Stanley Black & Decker makes industrial tools and hardware for homes. It offers an annual dividend of $3.32 per share, with a yield of 4.56%. The company pays out a dividend of 104.14% of earnings and 118.29% of cash flow.

Over the past year, Stanley Black & Decker saw a sharp drop in its stock price, and some experts believe the company is struggling to hold its place in its market. That could mean an even lower stock price ahead.

While dividend stocks can be a valuable component of a retirement portfolio, it might be worth thinking twice about investing in the companies on this list.

By carefully evaluating your investment choices, you can start investing in assets that align with your financial goals and risk tolerance.