Bigger isn't always better, and just because a stock has a high dividend yield -- annual dividend divided by share price -- that doesn't necessarily mean that it is a better investment than one with a lower yield.
For example, the dividend yield could increase if a stock price drops, which could be a red flag for financial struggles in the underlying business.
A company's payout ratio, which is the relationship between what it pays to shareholders and how much profit it generates, is another key metric. Too high a payout ratio could limit a company's ability to buy back shares, build the underlying operation or raise dividends.
A healthy dividend is one that will grow over time and provide a solid stream of income for the investor.
Here are five picks with dividend yields exceeding 5%. All the stocks on the below not only carry high yields but also have price appreciation potential, so investors could get a double benefit from being selective and thinking like a value stock picker when looking at these names.
These are the results....
