Just Energy (NYSE: JE / TSX: JE) is a company that U.S. consumers and investors are quickly realizing has become toxic to their wallets through deceptive energy marketing practices, and harmful to their brokerage accounts.

Investors tempted by its seemingly attractive 7% current yield should carefully consider the sustainability of its dividend through a rigorous analysis of the company’s earnings prospects, already debt-heavy capital structure, and management’s historical proclamations. Having Net Debt/EBITDA of 6.4x, we believe JE has overstretched its balance sheet and is struggling to survive amidst a brutally competitive market for its energy products, waning organic growth, and declining margins. The company already cut its dividend in February 2013, but we think another cut is highly probable.