WWE News: Prominent investment website advises investors to avoid WWE stock due to long term liquidity problems

Prominent investment website The Motley Fool has once again marked WWE stock as one to avoid, this time because the company is paying out 161 percent of its operating income in dividends. The analyst notes that while the company has enough cash reserves to continue this pay out for "a year or two," the company cannot sustain this level of pay out for much longer than that. You can read the article at http://www.fool.com/investing/general/2012/11/14/2-dividends-to-buy-and-1-to-sell.aspx and see the video attached at http://youtu.be/NvWrmHT7JM4.

Shore's Slant: For those unfamiliar with how this works, WWE takes their income and divides it by the number of shares of stock, and that gives you earnings per share (EPS). Dividends are the amount investors are paid per share. Right now, the dividends paid are 161 percent of EPS, meaning that the company is paying out more to investors than it is bringing in. WWE has enough cash to sustain that for a while, but there will eventually come a moment when they don't (assuming EPS doesn't climb above dividend pay outs), creating a liquidity crisis for the company.