Red Flags: High Yield = High Risk?

As previously mentioned, high dividend yield does not necessarily correspond with a good investment. An artificially high yield could come from a company's stock price dropping, which could signal that it is in trouble and won’t continue paying out investors.

For example a company worth $50 per share that pays $2 would have a yield of 4%. If the company's stock price were to drop to $20, the yield would skyrocket to 10%, despite the payout being identical.

Source: Market Watch