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Should I buy or sell this FTSE 100 dividend stock and its ~6% yield today?

Regular readers will know that many of us Foolish writers, myself included, believe that splashing the cash on Marks & Spencer (LSE: MKS) is a risk too far.

If the Brexit uncertainty and slowing economic growth that’s hammering retail sales is affecting even the best of them — as illustrated by scary recent trading releases from those former darlings ASOS and Next then it really is time to worry for the ‘second tier’ operators like M&S, a firm whose clothing ranges have long been accused of being behind the times as well as overpriced.

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Sure, it may have invested heavily in its online operations more recently, but its multichannel proposition still lags behind those of its rivals quite considerably. Meanwhile, footfall on the UK high street continues to crumble, and the heavy discounting that the country’s clothes sellers remain committed to looks set to keep margins under the cosh across the entire sector.

An expensive turnaround plan

Of course, the company’s struggles in the highly competitive clothing arena aren’t its only problem. Its other key retail division, Food, up until fairly recently the lifeboat in which sales were still rising, continues to spring holes and is starting to list.

It seems a long time ago that Marks & Spencer had the bit between its teeth and was planning aggressive expansion of its Simply Food outlets. Latest data from Nielsen showed food sales at the business slipped 0.3% in the 12 weeks to March 23, making it and Sainsbury’s the only grocery retailers from the country’s 10 biggest chains to print reversals in the period.

Much has been made of the company’s recently-concocted joint venture with Ocado to launch it into the online grocery segment. But the £750m M&S is paying for the deal looks like a premium rating for it to enter what is also a crushingly-competitive segment, and an endeavour in which plenty of hard paddling will be required to make any sort of impact threatens to take its focus away from the rejuvenation of its failing womenswear department.

Dividends will fall!

City analysts certainly believe its profits will keep on sliding for the foreseeable future given its broad collection of troubles — it’s expected to follow a predicted 11% bottom-line fall in the year to March 2019 with another 4% drop in this new fiscal period. And this gives plenty of reason for the dividend to keep on sliding, in my opinion.

When full-year results are unpackaged on May 22 the retailer will have reduced the annual payout for last year to 13.9p per share, down from the 18.7p reward of recent years and reflecting the fundraising efforts it is undertaking to finance that aforementioned Ocado tie-up. And whilst City forecasts are suggestive of a 16.3p reward in the current year, one which yields a stunning 5.8%, this consensus figure is bound to be hacked down in the wake of next month’s trading update.

M&S’s forward P/E ratio below 10 times might make it cheap, but it’s not cheap enough to encourage me to invest given its broad range of troubles. I for one won’t go anywhere near it.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended ASOS. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.