2 Dividend Stocks Retirees Should Avoid

Dividend stocks can be a profitable source of income and capital appreciation for retirees. However, investors must be careful to invest in the businesses best positioned to win today and tomorrow, rather than simply placing blind faith in the champions of old. There was a time when Coca Cola (NYSE:KO) was regarded as the prototypical retirement stock. It had a powerful brand, unequaled global distribution system, stable cash flows, and a steadily growing dividend. All of that remains true today. What's changed, however, is that Coca Cola's growth no longer seems so assured.

Wal-Mart Stores (NYSE:WMT) has ruled over the retail landscape for decades, creating fortunes along the way for early shareholders. And thanks to its strong cash flow generation and rising dividend payments, its stock has become a common recommendation for retirees. But Wal-Mart recently saw its market capitalization surpassed by e-commerce juggernaut Amazon (NASDAQ:AMZN), and I believe that's a powerful sign of what's to come. Wal-Mart came to dominance through an unbeatable combination of low prices, a wide selection of goods, and a convenient shopping experience. Now, however, Amazon is positioned to overtake the once unassailable Wal-Mart on each of those fronts.

Source: Motley Fool

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