3 Stocks with Dividends Over 6%

At first glance, a dividend yield of over 6% seems like every investor’s dream come true. In reality, however, such a high yield is often a warning sign. The market generally doesn’t give money away for free, and an above-average dividend payout is usually compensation for above-average risk—whether it’s stagnant revenue, a cyclical business, or a strained payout ratio. We subjected the following three large companies—whose stocks currently offer a dividend yield above 6%—to a thorough analysis of their business models and the sustainability of these payouts.

Verizon, UPS, and Vale all share a dividend yield of around 6% or higher. Otherwise, they are three completely different companies. Verizon is a defensive telecommunications giant with a twenty-year track record of consecutive dividend increases, which is currently undergoing an unexpected operational turnaround. UPS is a logistics leader in the midst of a painful restructuring, where the payout ratio has climbed above 100% of…