A stock at $50 paying $2 yields 4%. If the price falls to $25 and the dividend has not changed yet, it yields 8%. Nothing improved. The denominator moved.
Screen any market for the highest dividend yields and the list comes back mixed: companies in genuine trouble, sitting alongside structures that are required to pay most of their income out — REITs, MLPs, BDCs — and mature utilities with little left to reinvest in. Telling the first group from the other two is the whole job. The reason the screen mixes them is arithmetic. Yield is the annual dividend divided by the price, so when the price falls and the declared dividend has not been cut yet, the yield rises automatically. A high-yield screen is partly a falling-price screen.
— Educational, not financial advice.