3 Dividend Stocks That Retirees Should Avoid

It's been shown time and time again that dividend-paying stocks tend to outperform their non-dividend-paying peers, but not all dividend-paying stocks are created equal. Consider these three high dividend-paying stocks as an example. They all offer investors an arguably eye-popping dividend yield, but each is also facing significant challenges to its business model that could make them a risky bet for retirees.

Selena Maranjian: This recommendation of a dividend stock that retirees should avoid will hurt -- because its dividend yield was recently 12.2%! The company is Windstream Holdings Inc (NASDAQ: WIN), and for years it has been a major rural telecom company. Dan Caplinger: Despite its high dividend yield, AT&T (NYSE: T) is a somewhat dangerous stock for retirees and other conservative investors right now. Smaller players like T-Mobile US (NYSE: TMUS) and Sprint (NYSE: S) have taken more aggressive steps to become bigger players in the industry, cutting prices on their services and coming up with some innovative plan options. Jason Hall: Annaly Capital Management (NYSE: NLY) probably looks appealing to income-seeking investors right now, with its 11.25% yield. However, there's a potentially painful risk attached: Annaly's dividend has been steadily falling since 2011, and there's a good chance that trend could continue for the next few years.

Source: Motley Fool

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