The 25 Highest-Yielding Dividend Stocks in March: Seadrill Ltd (SDRL), Boise Inc. (BZ), Windstream Corporation (WIN)

The company owns offshore oil rigs that it rents out to energy companies. SeaDrill has made it a policy to steadily return cash to shareholders through dividends. The company does not pay a specific quarterly dividend — its dividend policy is “guided by earnings expectations, market prospects, current capital expenditure programs as well as investment opportunities.”

Seadrill Ltd (NYSE:SDRL) is in a great place competitively as it has some of the newest ultra-deepwater drillships among the drilling fleet. SeaDrill has also benefited from largely avoiding Brazil where its competitor Transocean (NYSE:RIG) is being sued for $20 billion over a relatively small oil spill. Seadrill Ltd (NYSE:SDRL) has just three rigs leased currently to Petrobras in Brazil and that may go down in the future as Petrobras just announced an oil rig lease freeze.

Overall, the company has a high debt load, but this is backed by great assets and long-term contracts. Dividend investors should take note.

Third is Windstream Corporation (NASDAQ:WIN) with a trailing yield of 11.5%. The company is a rural telecom that has been working to transition from a focus on residential clients to business clients. The company pays out a high 87% of its free cash flow as dividends. Investors have seen before with Frontier Communications and CenturyLink what happens to companies that cut their dividend. Fool analyst Dan Caplinger recently laid out 3 areas Windstream investors should watch, and I recommend anyone who is interested in Windstream Corporation (NASDAQ:WIN)should read it.

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-Yielding Dividend Stocks in March originally appeared on Fool.com  and is written by Dan Dzombak

Fool contributor Dan Dzombak owns shares of Frontier Communications. The Motley Fool recommends Exelon, Giant Interactive Group, and Seadrill. The Motley Fool owns shares of National Presto Industries, Seadrill, Transocean, and United Online.

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