Not all dividend stocks are created equal. You don’t want to invest in a company that pays most of its profits in dividends. This is a sign that the company is not reinvesting enough to promote future growth. If the company hits lean times and its cash starts to dry up, one of the first things to go is the dividend.
There are exceptions to this rule. For example, a real estate investment trust (REIT) must return at least 90% of its profits to investors.
Source: Stocks to Buy and Hold Forever