2 Big Dividends to Avoid (and 1 to Embrace)

The following post comes from the Motley Fool. It serves as a nice reminder that bigger is not always better when looking at dividend yield.

With yields on ultra-safe debt stuck in the gutter, many investors are reaching for higher income through dividend-paying stocks. That's a fine strategy -- as long as you're comfortable with the extra risks involved.

To minimize those risks, you won't want to reach too high. Dividend yields that are more than about 4%, for example, are usually worth extra research. You'll also want to screen for dividends that are backed up by strong earnings and sales growth. Ideally, those dividends will have a good chance of rising -- or at least staying put.  READ MORE