High Dividend. Who wouldn't want to get back 10% or even 15% of their investment every year, right? But you might think at first glance that it's not that simple!
A high dividend is tempting, but you should automatically pay attention. After all, it's rare that an extremely high payout doesn't hide some danger, or at least an upraised finger. It's not necessarily unsustainable, but it will likely require much more care and control on your part.
A dividend is the amount a company pays out to shareholders from its profits. This would sound good on the face of it - it has high profits, so it is doing well. Not necessarily. In fact, a high dividend may indicate that the company has limited opportunities to invest its profits in growth and development.
In addition, a high dividend may also signal that the company may be unsure of its future returns and wants to retain its shareholders. If the company fails to maintain its profitable performance, it…