[ricardobayes]

What is laid out here is called "yield chasing". Companies with extraorbitant dividend yield often end up losing much more on a 5Y timescale. There are very, very few companies that pay more than 3% and not end up losing money on the long run. (And even that is very bleak compared to just a vanilla S&P 500 yield). If there was a "magic bullet" high yield stock, everyone would flock and buy that one.

[sakopov]

There are plenty of great, stable companies that payout more than 3%. A lot of them are just value-traps like Coca-Cola, Verizon and AT&T where the stock price just sits in the same channel for decades but pays dividends slightly above inflation. There are also some high growth companies which pay great dividends but they're very hard to come by and usually have a few years of good track record before the run out of steam. So, there is no magic bullet in dividend investing. You always have to look at company financials and overall market trends and re-balance accordingly or else it might be a losing game. For example most bank stocks had their bottoms fall out in the last 3-4 months, however, there are plenty of banks whose stock prices got hit but financial positioning was immune to the crisis at hand. We're having a similar trend with REITs as well. It's just a matter of finding winners at their low valuations and getting divies while also benefiting from the stock price appreciation when the market turns around.

[sokoloff]

I’ve heard those called “accidental high yielders”.

Any company that has paid a dividend and whose stock price has crashed will have a high yield on paper. Those stocks are usually better to avoid rather than rush to buy someone else’s problem investment.

[WJW]

See also: https://www.fool.com/terms/v/value-trap/

[JKCalhoun]

Perhaps you would prefer so-called "Dividend Aristocrats" that have a long track-record of high dividends.

[huhtenberg]

Not high dividends, but increasing dividends.

For example, Caterpillar is of them, but its yield is under 3%.

https://www.marketwatch.com/investing/stock/CAT

[memling]

If you are a long term investor, dividend growth rate is an important metric when evaluating the aristocrats. At a 7.2% growth rate, your absolute payout will double in ten years regardless of the stock value appreciation. That may or may not be a good stategy for many inestors, but may be smarter than chasing yield.

[kmlx]

some of the mining giants usually offer great dividends and pretty stable stock.

check: rio tinto, bhp, anglo american, glencore.

[dannyw]

Avoided by many ESG funds, so you get to benefit from lower valuations.

[mystertea]

It looks like many of the high yield dividend stocks are leveraged funds. Does the same rule hold true in that arena? The historical data on those stocks doesn't seem to support that on first glance, at least.

[Oberbaumbrucke]

There's a lot that pay more than 3% (mining, oil, banks). Your point stands for say >6%.