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3 Dividend Stocks with Unsustainable Dividends

Long-term investors love stocks with high dividends. And, just because a dividend is high doesn't necessarily mean it's risky or it can't be sustained over the long term.

For example, ARMOUR residential REIT (NYSE: ARR  ) pays a dividend of nearly 14% and there is no reason to believe the company won't be able to continue paying it. I'll discuss why this is the case shortly.

However, a higher dividend yield definitely warrants a little extra homework on your part before buying the stock. There are a few "red flags" to look for that can tell you whether a high dividend is unsustainable, so let's take a look at what you should be on the lookout for, and why the dividends of Western Asset Mortgage Capital Corp (NYSE: WMC  ) , Resource Capital Corp (NYSE: RSO  ) , and Windstream Holdings (NASDAQ: WIN  ) are not to be trusted.

Here are some great stocks with sustainable high dividends
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. However, you want to make sure the company will be able to keep up the high payouts. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


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Matthew Frankel
KWMatt82

Matt brought his love of teaching and investing to the Fool in order to help people invest better, after several years as a math teacher. Matt specializes in writing about the best opportunities in bank stocks, real estate, and personal finance, but loves any investment at the right price. Follow me on Twitter to keep up with all of the best financial coverage!

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Related Tickers

8/28/2015 1:09 PM
ARR $21.63 Down -0.17 -0.78%
ARMOUR Residential… CAPS Rating: ****
RSO $3.14 Down -0.02 -0.63%
Resource Capital C… CAPS Rating: **
WIN $7.07 Up +0.28 +4.12%
Windstream Corp CAPS Rating: ***
WMC $12.92 Up +0.02 +0.16%
WESTERN ASSET MORT… CAPS Rating: ****

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