Dividend investing is popular again. Investors have taken to heart Jeremy Siegel's studies, which show that higher-yielding stocks tend to offer greater returns over time than low- or no-yield stocks.

The highest dividend yields can be very tantalizing. As long as a stock yielding 15% doesn't lose value, you'll make 15% in one year! In more cases than not, however, an astronomical yield is a bad sign for a stock. Since dividend yields and stock prices move in opposite directions, a high yield usually means that investors have begun to worry about the business and driven down its stock price.

Dividends are not guaranteed; you need to make sure that a business is generating enough cash to pay its dividend, or your investment could be disastrous.

A few months ago, I ran a screen for the highest-yielding telecom stocks, and it got such a good reception that I'm doing it again this quarter. The only limitations I set are I'm only considering telecoms and they must have a market cap greater than $300 million.

Here are the top 25 highest-yielding telecoms the screen produced:

 

Company

Market Cap (in millions)

Dividend Yield

1

Frontier Communications (NYSE: FTR)                         $5,135 14.5%

2

Portugal Telecom $5,339 13.5%

3

Cellcom Israel (NYSE: CEL) $1,648 12.3%

4

France Telecom $44,129 11.2%

5

Telefonica (NYSE: TEF) $83,826 11.1%

6

Partner Communications $1,413 10.5%

7

Windstream $6,838 8.5%

8

Telecom Corp. of New Zealand Ltd. (NYSE: NZT) $3,151 8.5%

9

Consolidated Communications $555 8.4%

10

CenturyLink (NYSE: CTL) $22,061 8.1%

11

NTELOS $451 7.9%

12

VimpelCom $16,715 7.7%

13

Brasil Telecom S.A. $3,675 7.6%

14

USA Mobility $304 7.3%

15

City Telecom $417 7.1%

16

Turkcell $10,402 7.0%

17

Telecom Italia SpA $20,743 6.8%

18

KT $7,770 6.6%

19

Philippine Long Distance Telephone Co. $12,046 6.4%

20

SK Telecom $9,168 6.3%

21

Mobile Telesystems OJSC $14,937 6.2%

22

AT&T $172,032 5.9%

23

Chunghwa Telecom $25,939 5.5%

24

Telefonos de Mexico, S.A.B. de C.V. $13,519 5.4%

25

BCE $31,097 5.3%

Source: S&P Capital IQ.

These stocks are a good place to start your research, but they're not formal recommendations. Remember, their seemingly irresistible yields could be ticking time bombs, so do your own due diligence. Also, make sure you diversify your picks across various sectors. As investors relearn every decade or so, you never want to put all your eggs in one basket -- no matter how tempting the dividends are.

For more dividend stock ideas, click here to get The Motley Fool's free report: "11 Rock-Solid Dividend Stocks."

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.