Stocks that pay a high dividend do so for a reason. They are either cash cows that are high risk or no longer growing or in very cyclical businesses that may dramatically cut their dividend.
There ain't no free lunch.
Wow, that is a pretty cynical view. I don't know which risk you mean when you conjoin:
"
...are either cash cows that are high risk or no longer growing or in very cyclical businesses that may dramatically cut their dividend..."
Consumer goods and medical diagnostic devices are two sectors that traditionally have exceptional div yields as a proportion of their overall returns.
I'll take each of your elements in turn, and apply them to these two sectors:
* "Cash Cows" - Yes, P&G and Abbott have a lot of money. They operate on a 'recurrent consumer' model, i.e. 'razor -- razor blade'. You don't just buy one tube of shampoo from P&G, you buy again and again and again. That behavior is called a 'reagent trail' in the medical diagnostics business, so they concentrate on getting 'placements' of proprietary gear, even if it is a loss, so that the stream of revenue of tiny margins but big volume on 'test kits' or 'consumables' is common, as opposed to big ticket one-time capital items like a new skyscraper sold or a helicopter. So, adding up those pennies, and not having to buy inventory for helicopters can indeed make for a cash-heavy business.
* "High Risk" - I am not sure what context you mean this in. If you don't mean 'volatility', but instead mean a dog of a company trying to entice purchasers to an otherwise unhealthy balance sheet, I think that is simply not the case with most dividend producing stock. They simply are in the earning and paying the owners phase of corp lifecycle, not necessarily as much in the new R&D and speculative risk spot of a young start up with NO div provided.
*"Cyclical" - the two examples I gave can indeed be cyclical; one based on the economy in general, the other on health care regulation and other influences. I think again, though, this is a canard as to whether these stocks are an attractive purchase or not -- was there not a recent RE 'cycle' that was quite speculative? Was there not a high tech sector 'cycle' in 2002?
* "May dramatically cut their dividend" -- again, it just wasn't clear to me how you were tying this together - does it mean that the companies tend to cut and then establish dividends to match the business cycle? For annual or other predictable cycles, for established and healthy businesses, this may not be true at all - for a certain category of business, again, the constancy and upward arc of div is considered a harbinger of health, so those companies that establish that typically will do cost cutting, layoffs, divest unprofitable segments, put off capital improvements, etc to preserve that div "story", esp if it has been developed over decades, even as their stock price or other business indicators may flag. Example:
Dividend History