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The S&P 500 has been historically overvalued (in hindsight) non-stop since 2010 using the Shiller P/E ratio. The historical average Shiller P/E ratio is 17.3. It’s currently at 38.1. Therefore, the S&P 500 is 121% overvalued according to the Shiller P/E ratio.

The big takeaway from this is that the market is trading at a very high valuation multiple today, relative to its history.

Overvalued dividend stocks can cause poor returns for the investor, if too high a price is paid for a stock. Therefore, investors should sell overvalued stocks that could generate negative returns. The following 3 overvalued dividend stocks should be avoided.

Paramount Resources Ltd. (PRMRF)

Paramount Resources is a Canadian energy company. Paramount Resources has a long history. The company was founded in 1976 and has been publicly-traded since 1978.

Paramount Resources now owns a far smaller oil and gas production base focused on the Kaybob region of Alberta along with the Willesden Green Duvernay area also located in Alberta.

The company announced its Q1 2025 results on May 13th, 2025. EPS of C$8.74 skyrocketed from C$0.46 in the prior year but results are not comparable. The vast majority of that profit was from gains on recent asset sales along with receiving insurance claims tied to wildfire damage.

Since the company recently sold off the majority of its production base, forward earnings will be far lower. Indeed, cash flow from operations slipped from C$1.52 to C$1.01 per share year-over-year.

Analysts are forecasting just 12 cents of earnings for Q2, which gives a much truer reflection of the company’s earnings power post-asset sale.

Analysts are forecasting just 12 cents of earnings for Q2, which gives a much truer reflection of the company’s earnings power post-asset sale. Excluding the one-time gain from asset sales, we estimate a 62% decline in EPS for 2025 to 60 cents.

There is downside risk to that estimate if the recent decline in oil prices accelerates.

Fortitude Gold Corp. (FTCO)

Fortitude Gold Corporation was spun-off from Gold Resource Corporation into a separate public company in December 2021. Fortitude Gold is a junior gold producer with operations in Nevada, U.S.A, one of the world’s premier mining friendly jurisdictions.

The company targets high-grade gold open pit heap leach operations averaging one gram per tonne of gold or greater. Its property portfolio currently consists of 100% ownership in seven high-grade gold properties.

All seven properties are within an approximate 30-mile radius of one another within the prolific Walker Lane Mineral Belt. The company generated $37.3 million in revenues last year, the majority of which were from gold, and is based in Colorado Springs, Colorado.

On April 29th, 2025, Fortitude Gold released its first-quarter 2025 results for the period ending March 31st, 2025. For the quarter, revenues came in at $6.5 million, marking a 20% decline compared to Q1 2024.

The decrease in revenue was largely due to a 41% drop in gold sales volume and a 26% decrease in silver sales volume. These declines were partially offset by a 38% increase in gold prices and a 38% increase in silver prices.

Moving to the bottom line, Fortitude reported a mine gross profit of $3.3 million compared to $4.2 million the previous year, reflecting the lower net sales.

The company also announced a reduction in its monthly dividend from $0.04 to $0.01 per share, effective with the May 2025 payment.

Declining revenue and a significant dividend cut are major reasons to avoid FTCO right now.

Hyster-Yale (HY)

Hyster-Yale Materials Handling was founded in 1985 and has since become a prominent global player in the materials handling industry.

The company designs, manufactures, and sells a comprehensive range of lift trucks and aftermarket parts, serving diverse customers across various sectors, including manufacturing, warehousing, and logistics.

The company segments its revenue primarily into three categories: new equipment sales, parts sales, and service revenues.

On May 6th, 2025, the company announced results for the first quarter of 2025. The company reported Q1 non-GAAP EPS of $0.49, in-line with analysts’ estimates, and produced revenue of $910.4 million, which was down 14.1% year-over-year.

Hyster-Yale opened the year with Q1 2025 consolidated revenues of $910 million, down 14% from last year, as softer lift truck demand carried over from late 2024.

Net income dipped to $8.6 million compared to $51.5 million a year ago, as lower production volumes and cost pressures weighed on margins. Inventory levels improved, down $69 million versus Q1 2024, showing early progress in aligning production with current demand trends.

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