Extreme high-yielders seem appealing on the surface, but dangers lurk underneath the surface which could jeopardize the dividend payouts in the future.
High dividend stocks are naturally appealing on the surface, due to their high dividend yields. But income investors need to make sure they do not fall into a dividend ‘trap’.
Like a partner who has burned you before but is trying to change, Prospect Capital is still hard to trust. The stock is very popular with income investors because of its 13.2% yield, its low share price, and the fact that it pays a dividend monthly.
Corporate bonds offer yield opportunities and diversification away from equity investments. Investment-grade bonds are safer but lower yield, while high-yield bonds offer higher returns but from riskier firms.
Companies Reporting Before The Bell • Ares Management (NYSE:ARES) is expected to report quarterly earnings at $1.09 per share on revenue of $864.54 million.
