10 Risky High Dividend Stocks To Sell

Published on October 14th, 2025 by Bob Ciura

Dividend stocks are naturally appealing for income investors, but not all dividend stocks are buys.

Income investors generally want to avoid dividend cuts whenever possible. Not only does a dividend cut result in a loss of income, but a company’s share price typically declines after announcing a dividend reduction or suspension.

With this in mind, we compiled a list of high dividend stocks with dividend yields above 5%. You can download your free copy of the high dividend stocks list by clicking on the link below:

Income investors should try to avoid dividend cuts or elimination as much as possible.

The 10 stocks in this article all have Dividend Risk Scores of ‘D’ or ‘F’ (our lowest grades) in the Sure Analysis Research Database, with payout ratios above 100%.

A payout ratio above 100% indicates the company is not generating enough underlying earnings to sustain the dividend payout. This leaves a high likelihood of a dividend cut or elimination at some point in the future.

As a result, these 10 risky high dividend stocks have sell ratings from Sure Dividend.

The list is sorted by current yield, from lowest to highest.

Table of Contents

You can instantly jump to any specific section of the article by using the links below:

Risky High Dividend Stock #10: Cross Timbers Royalty Trust (CRT)

Cross Timbers Royalty Trust is an oil and gas trust (about 50/50), set up in 1991 by XTO Energy.

Its unitholders have a 90% net profit interest in producing properties in Texas, Oklahoma, and New Mexico; and a 75% net profit interest in working interest properties in Texas and Oklahoma.

In mid-May, CRT reported (5/14/25) results for the first quarter of fiscal 2025. Oil and gas volumes grew 4% and 19%, respectively, over the prior year’s quarter.

The average realized prices of oil and gas dipped -6% and -10%, respectively, but distributable cash flow (DCF) per unit grew 12% thanks to higher volumes.

Click here to download our most recent Sure Analysis report on Cross Timbers Royalty Trust (CRT) (preview of page 1 of 3 shown below):

Risky High Dividend Stock #9: Timbercreek Financial Corp. (TBCRF)

Timbercreek Financial is a Canadian non-bank lender specializing in shorter-duration, structured financing solutions for commercial real estate investors.

The company provides primarily first-mortgage loans for income-producing properties, including multi-residential, retail, industrial, and office assets. Its loans are typically used for acquisition, redevelopment, or transitional financing, and are often repaid through term financing or asset sales.

Timbercreek’s portfolio is 100% commercial real estate-focused and highly urban, with about 92% of capital invested in Ontario, British Columbia, Quebec, and Alberta.

On July 30th, 2025, Timbercreek Financial reported its Q2 results. Distributable income for the quarter was $10.7 million, or $0.13 per share, compared to $11.9 million, or $0.15 per share, in Q2 2024.

This reflected a slightly lower average portfolio yield and a modest increase in expected credit loss, offset by higher average portfolio balances.

Net investment income was $18.4 million, down from $19.3 million in Q2 2024. Net income fell to $9.0 million, or $0.11 per share, from $11.2 million, or $0.14 per share, mainly due to higher expected credit loss provisions despite a larger mortgage portfolio and reduced financing costs.

Click here to download our most recent Sure Analysis report on TBCRF (preview of page 1 of 3 shown below):

Risky High Dividend Stock #8: PermRock Royalty Trust (PRT)

PermRock Royalty Trust is a trust formed in late 2017 by Boaz Energy, a company that is focused on the acquisition, development and operation of oil and natural gas properties in the Permian Basin. The Trust benefits from the unique characteristics of the Permian Basin, which is the most prolific oil-producing area in the U.S.

On May 14th, 2025, PermRock Royalty reported first quarter 2025 results for the period ending March 31st, 2025. Net profits income received by the trust was $1.71 million, compared to $1.30 million in the prior year quarter. The average realized sale price of oil declined by 5.1% year-over-year, while natural gas edged up by 1.6%.

Distributable income for the trust came to $1.47 million, up 31% from $1.12 million in the prior year period and distributable income per unit of $0.12 was higher by three cents from $0.09 in the prior year.

Click here to download our most recent Sure Analysis report on PermRock Royalty Trust (PRT) (preview of page 1 of 3 shown below):

Risky High Dividend Stock #7: Stellus Capital (SCM)

Stellus Capital Management provides capital solutions to companies with $5 million to $50 million of EBITDA and does so with a variety of instruments, the majority of which are debt.

Stellus provides first lien, second lien, mezzanine, convertible debt, and equity investments to a diverse group of customers, generally at high yields, in the US and Canada.

Stellus posted second quarter earnings on August 7th, 2025, and results were largely in line with expectations. Net investment income came to 34 cents per share, while core net investment income was a penny better at 35 cents per share.

Total investment income was $25.7 million, which was down slightly from $26.6 million a year ago. This is Stellus’ measure of revenue.

Gross operating expenses were $17.1 million, up from $16.5 million year-over-year. Fees and expenses related to borrowings were up from $3.9 million to $4.3 million. Net investment income was down from $11.8 million to $9.6 million, and on a per-share basis declined 14 cents to 34 cents.

The investment portfolio had a net change in unrealized appreciation of $1.4 million, much better than the $5.6 million depreciation a year ago.

Click here to download our most recent Sure Analysis report on SCM (preview of page 1 of 3 shown below):

Risky High Dividend Stock #6: Mesa Royalty Trust (MTR)

Mesa Royalty Trust was formed in 1979 and is based in Houston, Texas. It holds overriding royalty interests in natural gas and oil properties in the Hugoton field of Kansas and the San Juan Basin of New Mexico and Colorado.

The Trust does not operate the assets it receives 11.44% of 90% of the net proceeds from production on these properties after operating and marketing costs, with the interests managed and developed by third-party working interest owners such as Hilcorp San Juan LP, Scout Energy Group, Simcoe LLC, and Red Willow Production Company.

On August 14th, 2025, Mesa Royalty Trust released its Q2 results the quarter ended June 30th, 2025. The Trust reported distributable income of $0.105 per unit before reserve adjustments, which after changes to the contingent reserve translated into $0.0946 per unit actually distributed, down from $0.1125 a year earlier.

Royalty income of $220,855 came entirely from the San Juan Basin – New Mexico properties operated by Hilcorp, while the Hugoton and San Juan, with Colorado properties again generating no net proceeds because costs topped revenues.

Excess production costs rose to $933,830, an increase from $793,838 at year-end 2024, and must be recovered before cash flow from those properties can resume. We believe the company has an earnings power of $0.80.

Click here to download our most recent Sure Analysis report on MTR (preview of page 1 of 3 shown below):

Risky High Dividend Stock #5: Ellington Credit Co. (EARN)

Ellington Credit Co. acquires, invests in, and manages residential mortgage and real estate related assets. Ellington focuses primarily on residential mortgage-backed securities, specifically those backed by a U.S. Government agency or U.S. government–sponsored enterprise.

Agency MBS are created and backed by government agencies or enterprises, while non-agency MBS are not guaranteed by the government.

On August 19th, 2025, Ellington Credit reported its first fiscal quarter results for the period ending June 30, 2025. The company generated net income of $10.2 million, or $0.27 per share.

Ellington achieved adjusted net investment income of $6.6 million in the quarter, or $0.18 per share. At quarter end, Ellington had $36.6 million in cash and cash equivalents.

Click here to download our most recent Sure Analysis report on EARN (preview of page 1 of 3 shown below):

Risky High Dividend Stock #4: Prospect Capital (PSEC)

Prospect Capital Corporation is a Business Development Company, or BDC, that provides private debt and private equity to middle–market companies in the U.S.

The company focuses on direct lending to owner–operated companies, as well as sponsor–backed transactions. Prospect invests primarily in first and second lien senior loans and mezzanine debt, with occasional equity investments. 

Prospect posted fourth quarter and full-year results on August 26th, 2025, and results were weak once again as the company continues to struggle. Net interest income for the quarter was 17 cents per share. NII was down from 25 cents from the same period a year ago. Total revenue plummeted 21% year-over-year to $167 million.

Total originations were $271 million, up from $196 million in the prior quarter. Total repayments and sales were $445 million, up from just $192 million in Q3. Net originations, then, fell from $4 million in Q3 to -$175 million in the final quarter of the year, shrinking the company’s portfolio to $6.67 billion. That’s down from $7.72 billion a year ago.

Annualized current yield for all investments rose to 9.6% from 9.2% in Q3, but lower from 9.8% a year ago.

Click here to download our most recent Sure Analysis report on PSEC (preview of page 1 of 3 shown below):

Overly Risky High Dividend Stock #3: Orchid Island Capital (ORC)

Orchid Island Capital is a mortgage REIT that is externally managed by Bimini Advisors LLC and focuses on investing in residential mortgage-backed securities (RMBS), including pass-through and structured agency RMBSs.

These financial instruments generate cash flow based on residential loans such as mortgages, subprime, and home-equity loans.

On July 24, 2025, Orchid Island Capital, Inc. reported its financial results for the second quarter of 2025. The company recorded a net loss of $33.6 million, or $0.29 per common share, driven by net interest income of $23.2 million, total expenses of $5.0 million, and net realized and unrealized losses of $51.7 million on RMBS and derivatives.

Dividends declared and paid were $0.36 per common share, with book value per share at $7.21 by June 30, 2025, reflecting a total return of (4.66)%.

Liquidity remained strong at $492.5 million, comprising cash and unpledged securities, representing 54% of stockholders’ equity, with borrowing capacity exceeding $6.7 billion across 24 lenders.

Click here to download our most recent Sure Analysis report on Orchid Island Capital, Inc. (ORC) (preview of page 1 of 3 shown below):

Risky High Dividend Stock #2: Horizon Technology Finance (HRZN)

Horizon Technology Finance Corp. is a BDC that provides venture capital to small and medium–sized companies in the technology, life sciences, and healthcare–IT sectors.

The company has generated attractive risk–adjusted returns through directly originated senior secured loans and additional capital appreciation through warrants.

On August 7th, 2025, Horizon announced its Q2 results for the period ending June 30th, 2025. For the quarter, total investment income fell 4.5% year-over-year to $24.5 million, primarily due to lower interest income on investments from the debt investment portfolio.

More specifically, the company’s dollar-weighted annualized yield on average debt investments in Q2 of 2025 and Q2 of 2024 was 15.8% and 15.9%, respectively.

Net investment income per share (IIS) fell to $0.28, down from $0.36 compared to Q2-2024. Net asset value (NAV) per share landed at $6.75, down from $9.12 year-over-year and $8.43 sequentially.

After paying its monthly distributions, Horizon’s undistributed spillover income as of the end of the quarter was $0.94 per share, indicating a considerable cash cushion. Management assured investors of the dividend’s stability by declaring three forward monthly dividends at a rate of $0.11.

Click here to download our most recent Sure Analysis report on HRZN (preview of page 1 of 3 shown below):

Risky High Dividend Stock #1: Oxford Square Capital (OXSQ)

Oxford Square Capital Corp. is a BDC (Business Development Company) specializing in financing early- and middle-stage businesses through loans and investments in collateralized loan obligations.

At the end of last quarter, the total fair value of Oxford Square’s investment portfolio stood at about $243.2 million across 61 positions, allocated approximately 61% in secured debt (48% first-lien, 13% second-lien), 38% in CLO equity, and about 1% in equity or other investments. Last year, the BDC generated roughly $42.7 million in total investment income.

On August 7th, 2025, Oxford Square Capital reported its Q2 results for the period ending June 30th, 2025. The company generated about $9.5 million in total investment income, down from $10.2 million in Q1 2025 and $11.4 million in Q2 2024, mainly due to lower interest income from debt investments.

The weighted average yield on debt investments ticked up to 14.5%, compared to 14.3% in Q1. The BDC’s effective yield on CLO equity investments slipped to 8.8%, while the cash distribution yield on cash-generating CLO equity fell to 13.8% (from 15.5% in Q1).

The weighted average cash distribution yield on income-producing secured notes was 9.0%, versus 9.7% in Q1. Total expenses were $4.0 million, modestly lower than $4.1 million in Q1.

Net investment income (NII) came in at $5.5 million, or $0.08 per share, compared with $6.1 million, or $0.09 per share in Q1 2025, and $7.7 million, or $0.13 per share in Q2 2024.

Click here to download our most recent Sure Analysis report on OXSQ (preview of page 1 of 3 shown below):

Final Thoughts

High dividend stocks are naturally appealing on the surface, due to their high dividend yields.

But income investors need to make sure they do not fall into a dividend ‘trap’, meaning purchasing a stock solely due to its high yield, only to see the company cut or eliminate the dividend payout.

The 10 risky dividend stocks on this list have unsustainable dividends, as indicated by their extremely high dividend payout ratios.

As a result, income investors looking for quality dividend stocks for long-term income, should sell the 10 risky dividend stocks in this article.

Additional Reading

If you are interested in finding high-quality dividend growth stocks and/or other high-yield securities and income securities, the following Sure Dividend resources will be useful:

High-Yield Individual Security Research

Other Sure Dividend Resources