Yield Traps Vs. Income Kings: Harsh Reality Of High-Dividend Stocks

Benzinga_recent_news2025-12-30

For income-focused investors, a 10% dividend yield can be very attractive, but such high yields often signal significant underlying risk. A yield becomes a “trap” when the high percentage is caused by...

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Income Kings: Harsh Reality Of High-Dividend Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-12-30 03:57 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/trading-ideas/dividends/25/12/49618919/yield-traps-vs-income-kings-harsh-reality-of-high-dividend-stocks><strong>Benzinga_recent_news</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>For income-focused investors, a 10% dividend yield can be very attractive, but such high yields often signal significant underlying risk.\nA yield becomes a “trap” when the high percentage is caused by...</p>\n\n<a href=\"https://www.benzinga.com/trading-ideas/dividends/25/12/49618919/yield-traps-vs-income-kings-harsh-reality-of-high-dividend-stocks\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FCF","symbol_name":"第一联邦金融","start_time":0,"source_url":"https://www.benzinga.com/trading-ideas/dividends/25/12/49618919/yield-traps-vs-income-kings-harsh-reality-of-high-dividend-stocks","article_id":"2595306327","we_media_id":null,"thumbnails":["https://cdn.benzinga.com/files/images/story/2025/12/29/Businessman-Is-Selecting-Dividends-On-Th.jpeg?optimize=medium&dpr=2&auto=webp&width=240"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/trading-ideas/dividends/25/12/49618919/yield-traps-vs-income-kings-harsh-reality-of-high-dividend-stocks","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2595306327","pubTimestamp":1767038220,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"For income-focused investors, a 10% dividend yield can be very attractive, but high yields can often signal significant underlying risk.","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FCF":"第一联邦金融","BK4211":"区域性银行"},"translate_title":"收益率陷阱与收益之王：高股息股票的严酷现实","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FCF":1},"content_text":"For income-focused investors, a 10% dividend yield can be very attractive, but such high yields often signal significant underlying risk.\nA yield becomes a “trap” when the high percentage is caused by a collapsing stock price rather than a growing business.\nRead Next: Top 10 Most Shorted Stocks: Lucid, MARA, Hims and More \nThe Benzinga Pro scanner feature was used to create a list of stocks with dividend yields above 10% (and market caps of at least $2 billion and floats above 5 million to filter out the noise). \nRead Next:Elon Musk Predicts A New Economy: No Poverty, No Hunger And Work Is Optional\nSuccessful dividend investing requires looking past the headline yield. \nThe harsh reality of high-dividend stocks is that total return—the combination of price appreciation and dividends—is what actually builds wealth. \nBefore investing in high-yielders like those in the table above, savvy investors should scrutinize the company’s free cash flow (FCF). \nIf a company is not generating enough actual cash to cover its checks, the high yield is a red flag.\nMany 10%+ yielding stocks (like REITs and BDCs) pay non-qualified dividends, meaning they are taxed at the highest marginal income tax rate. \nQualified dividends from established blue-chips (like Altria or Verizon) enjoy the same preferential rates as long-term capital gains.\nHigh-yield seekers should consider holding non-qualified stocks in tax-advantaged accounts, like an IRA, to avoid a heavy tax bill.\nTaxation depends on whether the dividend is qualified or non-qualified.\nRead Next: \nPhoto: Shutterstock","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.35.13","shortVersion":"4.35.13","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2595306327","isCrawlerRequest":true}