On the surface, it seems obvious that chasing big dividends is smart trading. But in practice, a double-digit dividend stock may also be a red flag.
Because dividend yield is based on the dividend per share and current price per share, if the price plummets, the yield goes up. A big dividend could result from bigger problems in the fundamentals.
For the purpose of evaluating dividend yield, the reasons behind these changes are not important; what is important is the underlying cause of the decline
