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Red alert! Will these FTSE 100 stocks be next to cut dividends?

What a trying time to be a Carnival (LSE: CCL) investor. After a solid (if bumpy) first five-and-a-half months of 2019 — a reassuring response to poor first-quarter forecasts and subsequent collapse in the dying embers of December — sentiment for the cruise ship operator has hit the rocks again following a shock profit warning last week.

The FTSE 100 firm’s now dealing at levels not seen since September 2016, below £35.50 per share, though there’s light signs of dip buyers slipping in to grab a slice of the action. And on paper there’s plenty out there to be tempted by — right now a forward P/E ratio of 10.1 times provides plenty for value chasers to get stuck into, while a 4.5% corresponding dividend yield beats those of countless blue-chip rivals.

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Party pooper

But is Carnival really worth the aggro? I would argue not — there’s no shortage of dirt-cheap income shares to choose from, after all, and the latest disappointing update provides plenty to worry about.

In it the business scaled back its earnings estimates for the year ending November 2019 to between $4.25 and $4.35 per share, down from its prior projection ranging from $4.35 to $4.55. The impact of President Trump’s ban on cruises to Cuba, as well as problems with the Carnival Vista vessel, have all been problematic in recent times and forced those profits downgrades. And things could get even tougher for Carnival as fuel prices rise again and the US economy slows, casting some dark clouds over the demand outlook for its holidays.

City analysts are expecting Carnival to raise the dividend to 205 US cents per share this year, though I would argue that the decision to hold the last interim at 50 cents in recent days provides some cause for concern. The travel giant may not be under the sort of strain that could cause a dividend cut, but it may struggle to lift dividends in the near-term (and possibly beyond too) in my opinion.

How about this 8%-yielder instead?

There’s also a lot of chatter going on about a possible payout cut over at Persimmon (LSE: PSN). And on paper at least there’s some reason to be concerned — an anticipated dividend of 235p per share for 2019 may yield 8.3%, but many remain sceptical as to whether it’ll have what it takes to meet this projection given meagre dividend cover of 1.2 times.

But worry not, I say. It’s not as if there are storm clouds on the horizon to obliterate profits, as illustrated by May’s update in which the Footsie firm praised the “resilient” new homes market with demand remaining healthy and property values firm. Indeed, City brokers expect a 3% earnings increase this year, a forecast that I can foresee being upgraded given the recent improvement in homebuyer activity.

In addition, dividend hunters can take huge comfort in the vast amounts of cash Persimmon has on its balance sheet — a shade over £1bn as of December, to be exact — and therefore its ability to meet current estimates even if market conditions worsen. In my opinion this business is one of the hottest income bets on Britain’s blue-chip index.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Carnival. 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.