2 High-Yield Stocks With Very Different Risk Factors
High-yielding dividend stocks may look like an attractive buy at first glance, but high returns are usually high for a reason -- there's a risk.
Every stock has its own unique risk factors. Market volatility, short or long-term headwinds inhibiting the company's ability to grow, or poor management decisions like taking on too much debt are just a few reasons a stock's dividend yields are high and thus, carrying risk.
Rather than steering clear of high-yielding stocks altogether, investors should try to understand the cause of the problem to determine if the risks are worth the reward. For example, New Residential Investment Corp (NYSE: NRZ) and Simon Property Group (NYSE: SPG) are real estate investment trusts (REITs) that are paying high dividend yields. Both REITs' high returns are being driven by very different risk factors. Here's what's happening with each.
Source Fool.com
