American Capital Agency Corp. (AGNC), Pitney Bowes Inc. (PBI), and the Twenty-Five Highest Dividend Paying Stocks in April

Windstream Corporation (NASDAQ:WIN) is second on the list, with a trailing yield of 12.2%. This rural telecom provider has been working to reinvent itself as landline phone usage continues to decline, and throughout the transition, the company has continued to pay a $0.25-per-quarter dividend. Other rural telecoms facing similar challenges have had to cut their dividends. Most recently, CenturyLink, Inc. (NYSE:CTL) cut its dividend by 25% in February, and the stock was pummeled afterwards.

Windstream currently has a payout ratio above 85%. Odds are it will have to cut its payout at some point, and the shares will probably take a massive hit if it does. If you’re willing to bet otherwise, I highly recommend you read Dan Caplinger’s analysis of three areas Windstream investors should watch. For me, though, I’d pass on Windstream Corporation (NASDAQ:WIN).

Pitney Bowes Inc. (NYSE:PBI) comes in third with a trailing yield of 10.4%. This company provides services focused on physical mail — think fliers, postage, junk mail, and the like. With mail volumes declining as more publications and advertising go digital, the company has been trying to transition its business away from mail and toward business services, geocoding, and analytics. Transitioning, though, takes a lot of money, and Pitney Bowes Inc. (NYSE:PBI) has stopped increasing its dividend, taking it off the list of dividend aristocrats. While shares look cheap at a P/E of 6.7, the company’s earnings are steadily dropping. With a payout ratio near 70% and declining a declining business, there’s a good chance Pitney Bowes will have to cut its quarterly dividend. I’d pass on this one.

Foolish bottom line
Remember, these seemingly irresistible yields could be ticking time bombs, so do your own due diligence. Also make sure you diversify your picks across various sectors. As investors relearn every decade or so, you never want to put all your eggs in one basket — no matter how tempting the dividends are.

The article The 25 Highest Dividend-Paying Stocks in April originally appeared on Fool.com and is written by Dan Dzombak.

Find Dan Dzombak on Twitter, @DanDzombak, or on his Facebook page, DanDzombak. He owns shares of Frontier Communications. The Motley Fool recommends Exelon, Giant Interactive Group, and Seadrill and owns shares of National Presto Industries, Seadrill, and United Online.

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