High-Yield Dividend Stocks Offer Income Potential But Also Carry Risks

Dividend stocks historically outperform non-dividend paying stocks over the long run, but high yields can also indicate risk.

AT&T offers a very high 7.73% dividend yield and its balance sheet has improved after spinning off WarnerMedia.

Alliance Resource Partners is a coal producer with a 12.12% yield, benefiting from high coal prices and conservative operations.

Annaly Capital Management is a mortgage REIT with a 14.83% yield, poised to benefit as rates rise despite current headwinds.

With an average yield of 11.56%, splitting an investment of $2,600 equally among these 3 stocks can generate about $300 in annual dividend income.