Investors are skeptical about extreme dividends these days. A quick screen shows that 130 companies sport a yield of at least 10%. But for every market-beating Prospect Capital (Nasdaq: PSEC) or Newcastle Investment (NYSE: NCT), there are 10 big underperformers like Cellcom Israel (NYSE: CEL) and Pitney Bowes (NYSE: PBI).

Let's dig in!
It's not like the market-beaters are far and away higher-quality businesses than the losers. The losers all have upsides, and the current winners are far from perfect.

Prospect Capital scores a perfect five out of five stars in our Motley Fool CAPS system, and Newcastle has snagged a very respectable four-star epaulet. But Cellcom Israel can match that four-star honor, and Pitney Bowes doesn't fall far behind with a decent three-star rating. Our nearly 180-000-plus active CAPS players don't hate the losers for losing.

Fellow Fool Ilan Moscovitz highlights Newcastle as one of the best-performing REIT stocks on the market. The stock is also a favorite with Wall Street's analysts, as all four of the firms covering the stock give it "buy" ratings. Analyst firm Compass Point reiterated its bullish rating today, praising Newcastle's "consistent cash flow" and a newfound focus on papers not backed by mortgage loans. In other words, this 10.9% dividend appears to be in good shape.

Pitney Bowes is a real dividend champion, having raised its payouts for at least 30 consecutive years. The rate of these increases has slowed in recent years, but the leader in postage and document management equipment collects solid free cash flows every quarter and pays out less than half of it as dividends. Mr. Market is hating the stock right now as the Postal Service teeters on the brink of bankruptcy, but the plunging share price has created a 10.8% dividend based on stellar cash flows. If you believe that Pitney Bowes is diversified enough to survive massive order cutbacks from its largest customer, or that the USPS will muddle through somehow, this is nothing short of a spectacular dividend play at current prices.

Cellcom Israel is a different animal. The company is facing brand-new, low-cost competition in its home market, and its dividend history is anything but stable. Rich Duprey worries that the currently very generous yield might not be sustainable, as profits and cash flows are plunging. The company pressed "pause" on its dividend payouts last night because of financial pressures. But 97% of the more than 550 CAPS players with an opinion on the stock still give it a thumbs-up rating. Management left the door open for a return to regular payouts if its cost-cutting measures pay off, but this one's a gamble.

Finally, Prospect Capital has made the unusual choice to pay out dividends monthly rather than quarterly. The investment firm bets capital on up-and-coming startups in various fields. Look up "lumpy earnings" in a dictionary, and you'll find Prospect's logo in the definition. So the company has a habit of filling out its dividend payouts with short-term loans. Now, Prospect actually came up with $74 million of free cash flows last quarter, easily covering its $32 million dividend budget, but investors need to be aware of the debt-wrangling machinery behind the curtains. In short, I'm kind of shocked to find this particular stock winning a perfect five-star CAPS rating while some fine companies don't make the cut.

The Foolish moral of this story
No dividend is perfect, and I applaud investors for considering the risks in any high-yield stock.

When dividend yields soar, it's either due to remarkable payouts or collapsing share prices. In many cases, prices on high-yielding shares fall because investors worry about coming dividend cuts.

So go ahead and consider the risks inherent in super-rich dividends. After all, fantastic payouts can be overwhelmed by falling market values, particularly if the collapse is followed -- or started -- by a dividend cut.

If you're looking for some safe dividend payers, have a look at nine rock-solid dividend stocks that can secure your retirement. These yields may be a bit lower, but so are the market risks. This special report is free for a limited time, so get your copy right now.

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.