10 of the Worst S&P 500 Dividend Stocks of 2018

Don't buy them for safety.

Many dividend investors like the security that comes from regular payouts from their stocks. Not only does this provide a steady stream of cash, it can also fuel significant outperformance in your portfolio -- that is, share appreciation in the stocks plus the dividend payments. However, don't be fooled into thinking a stock is safer because it pays a dividend. Even stocks with a substantial payday could be terrible investments if they fall so quickly the dividends can't cover losses. Check out these 10 struggling S&P 500 dividend payers that were among the worst performers in 2018. They are cautionary tales of what kind of dividend investment to avoid in 2019.

Halliburton Co. (ticker: HAL)

With oil about $45 a barrel at the end of 2018 after reaching $76 earlier in the year, many energy stocks have taken it on the chin. Oil field service stock Halliburton has been hit harder than most. As a contractor for many big oil companies, it is the target of cutbacks when crude prices slump and there's less incentive to drill aggressively. The yield is decent on this dividend payer, but with a massive decline in the last year and current trends in oil prices not looking good, HAL stock seems shaky and risky given the broader market volatility.

YTD performance: -47 percent
Current yield: 2.7 percent

Unum Group (UNM)

Life insurance giant Unum is a seemingly stable dividend stock, with distributions fueled by policyholder premiums. But a surprising revelation in May about the performance of its long-term care division spooked many investors and shares fell 15 percent in a single session. Wall Street was largely in a wait-and-see mode across summer and fall, but recent turmoil caused many to stop waiting on UNM and prompted fresh declines. It's tough to believe in any stock when the market goes haywire, but it's even harder to trust a stock like Unum that dumped bad numbers on unsuspecting investors.

YTD performance: -47 percent
Current yield: 3.6 percent

Cimarex Energy Co. (XEC)

This is another troubled energy stock but in a different way. Cimarex is a mid-sized fracking firm that specializes in production from shale fields. As growth rates peak and energy prices roll back, investors put pressure on stocks like XEC. Cimarex thought it had a way to show Wall Street it was on the upswing with a massive $1.6 billion bid for competitor Resolute Energy in November. But falling energy prices, the rising cost of borrowing to finance the bid and general bearish sentiment have conspired to make that deal look like an ill-timed boondoggle.

YTD performance: -50 percent
Current yield: 1.2 percent

Affiliated Managers Group (AMG)

Affiliated Managers is an investment firm focused on providing asset management services to institutional clients and high net-worth individuals. But in the age of low-cost index funds, it's increasingly difficult to justify high-priced managers, and competition for clients is fierce. AMG is the umbrella company over a smattering of hedge funds, private equity firms and other similar ventures. Its largest shareholders are institutions like Vanguard or Blackrock, but that's a double-edged sword as these big guys have been reluctant to keep buying. The absence of other investor interest has led to a steady but substantial decline in shares.

YTD performance: -52 percent
Current yield: 1.2 percent

Perrigo Co. (PRGO)

Ireland-based generic pharmaceuticals company Perrigo is indeed an S&P 500 component. That's because of a 2013 tax inversion where this company, which still does the vast majority of sales in the U.S., acquired Irish firm Elan and moved its headquarters there mostly on paper in what it thought was a clever move to win a smaller tax bill. Unfortunately, even Ireland's tax man is difficult to please. In December, PRGO was slapped with a $1.9 billion bill relating to prior drug sales. Shares had already been soft this year but that massive tax claim pushed them even lower.

YTD performance: -55 percent
Current yield: 1.9 percent

Western Digital Corp. (WDC)

In the age of mobile devices, hard disk drive manufacturers like Western Digital have been challenged. But above-average dividends, better-than-expected demand and proactive cost-cutting have managed to keep these tech stocks reasonably relevant the last few years. Sadly, margins steadily declined in 2018 and revenue has seemingly plateaued -- a bad combination for 2019's profit outlook. Market volatility and general uncertainty about a cyclical slowdown in tech spending has also added fuel to the fire, and investors have found plenty of reasons to sell WDC stock steadily in 2018.

YTD performance: -55 percent
Current yield: 5.4 percent

Invesco Ltd. (IVZ)

Invesco is the brand behind several exchange-traded funds, including Invesco QQQ Trust (QQQ) that is a mainstay of investors interested in large-cap tech stocks. But, tech has suffered in 2018 and Invesco's flagship ETF has fallen out of favor. While it has other offerings, none are nearly as popular as the low-cost index funds offered by larger firms like Vanguard or Fidelity. And with market volatility, it's hard to bank on IVZ gathering up more assets -- making it very hard to believe in, despite an incredible dividend yield.

YTD performance: -55 percent
Current yield: 7.2 percent

L Brands (LB)

E-commerce made things bad for retailer L Brands, parent of Victoria's Secret and Bath and Body Works. Then, in its Q3 earnings report in November, LB posted profits that were roughly half what they were a year ago. That prompted another drop that has made LB one of the worst performers in the S&P 500. Many investors continue to hang on because of the dividend, but considering full-year 2018 earnings should come in at $2.70 per share and dividend payouts will hit $2.40 per share, there's reason to worry the dividend may be at risk of a cut.

YTD performance: -56 percent
Current yield: 9.4 percent

General Electric Co. (GE)

Even causal investors should know about GE's troubles that include three dividend cuts since the financial crisis and a share price that has cratered from over $30 at the end of 2016 to about $7 at present. It's important to note that the pain seems to be far from over, however, with the company steadily setting new 52-week lows this year and showing continued downside momentum. Before you start believing GE is a bargain that is oversold, its history shows this stock has a habit of surprising Wall Street with just how bad its performance can be.

YTD performance: -59 percent
Current yield: 0.5 percent

Delphi Technologies (DLPH)

Speaking of stock that can surprise with terrible performance, Delphi is worth noting for its dramatic numbers. In October 2017, its CEO quit after less than a year and the engine parts manufacturer lowered its profit outlook soon after. At the same time, a general slowdown in auto sales created a stiff headwind to performance that would have been hard to counter even in the best of times. Compounding the pain is that DLPH was spun out of a larger auto parts firm, leaving the company fewer business lines to fall back on in tough times.

YTD performance: -74 percent
Current yield: 4.8 percent

The Worst S&P 500 Dividend Stocks of 2018

To recap, here are 10 of the worst S&P 500 dividend stocks in 2018:

-- Halliburton Co. (HAL)

-- Unum Group (UNM)

-- Cimarex Energy Co. (XEC)

-- Affiliated Managers Group (AMG)

-- Perrigo Co. (PRGO)

-- Western Digital Corp. (WDC)

-- Invesco Ltd. (IVZ)

-- L Brands (LB)

-- General Electric Co. (GE)

-- Delphi Technologies (DLPH)