Great dividend stocks offer more than just a beefy dividend yield. Serious income investors also look for a steady series of increased payouts and a policy backed by torrential cash flows.

The stocks you'll see below all come with fantastic dividend yields, but they fall short of the Platonic dividend stock ideal in other ways. Read on to see why you shouldn't invest your retirement nest egg in these deceptively large yields.

Dreadful dividends by the numbers



Dividend Yield

5-Year Dividend Growth

Cash Payout Ratio

Suburban Propane Partners





NGL Energy Partners










Franklin Street Properties










Data source: YCharts and Morningstar.

The dividend growth rates above are 5-year totals, not annual averages. Broken down into compound annual growth rates over five years, Suburban Propane's increases work out to 0.8% per year and NGL Energy Partners boosted its payout by an annual average of 1.5%. Macy's sticks out with a generous average boost of 14.8% and decent headroom for dividend growth as the retailer budgets just 40% of its annual free cash flows to cover dividend payments. It's still a dangerous yield trap, though -- we'll get back to Macy's in a minute.

The dirt on these dividend traps

Suburban Propane often powers its massive dividend yields via cash reserves from the balance sheet, at least partly. The propane distributor sent out dividend checks worth $216 million over the last four quarters but free cash flows stopped at just $125 million. On top of that, the company is down to $7 million in cash while nursing a debt balance of $1.2 billion. This dividend policy appears headed for a big cut or an outright cancellation someday soon.

Oil logistics expert NGL Energy Partners has reported negative free cash flows for the last two years, financing its eye-catching dividend yields by holding stock sales and raising additional debt. This balance sheet holds $12 million of cash equivalents, alongside $3 billion in long-term debt and zero hope of future dividend increases. NGL Energy slashed its payouts by 39% last year and looks almost certain to take even more dividend funds off the table just to keep the lights on.

Regional telecom CenturyLink hasn't lowered its quarterly payouts since the spring of 2013, and that's nice. On the other hand, the payouts haven't moved up either. CenturyLink's dividend payouts have stayed firm at $0.54 per share for 18 straight quarters. Free cash flows have plunged 56% lower over the same period, and a 45% share price drop is the only thing propping the dividend yield up. Danger, Will Robinson -- this is another dangerous dividend policy.

Real estate Franklin Street, which mainly invests in large-scale, American office space properties, has not changed its quarterly dividend payouts since the summer of 2008, when the checks were cut from $0.31 to $0.19 per share. The company burned $216 million of free cash over the last four quarters while spending $79 million on dividend payments. This is not a sustainable dividend policy unless Franklin Street can turn its cash-burning fortunes around.

Hands holding a lighter and some burning 20-dollar bills on a black background.

Image source: Getty Images.

One more thing...

Finally, we're back to Macy's. By the metrics posted earlier, the household-name retailer doesn't look like it belongs in a list of horrible dividend yield traps. That only makes the stock more dangerous, because it's easy to miss the real danger here.

Five years ago, Macy's offered a 1.7% dividend yield built on nothing but free cash flows. Dividend expenses added up to $210 million on an annual basis, paired with a $476 million stock buyback policy, and the free cash ran deep and wide at $1.5 billion per year.

Today, the dividend budget has doubled but the annual buyback policy has been restrained to just $175 million. Free cash flows fell back to $1.2 billion over the same period and share prices plunged 36% lower.

Bullish investors hope that Macy's might be able to adjust to the e-commerce sea change while reaping value from its large portfolio of real estate assets. Bears like yours truly see a nine-quarter streak of negative revenue growth and an overly huge physical store footprint.

Fellow Fool Leo Sun argues that the company's only realistic business model at this point involves closing stores and selling land parcels by the boatload -- but that's hardly a path to sustainable dividend payments in the long run.

That juicy 7% dividend yield looks great, but the good times won't last. Macy's is the sneakiest and deadliest of all the dividend yield traps on this list.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.