Which of These 10 Dividend Stocks Is Worth the Risk? (Correct)

Pepco Holdings(POM)

Company Description: Pepco is a utility company that distributes electricity and natural gas.

Dividend Yield: 5.5%

Stock Price Performance YTD/2011: -1% / 11%

Is The Yield Worth It?: Given the stable nature of the utilities sector, it's no surprise that Pepco has been paying a dividend since 1904. Credit Suisse upgraded the stock in early December, noting that the company is "uniquely positioned relative to most utilities to structurally improve its earned ROEs over coming years." Improvements in net income will bode well for continued dividend payments.

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Verizon(VZ)

Company Description: Verizon, like rival AT&T, provides wireless communication, high-speed Internet and digital TV services.

Dividend Yield: 5.3%

Stock Price Performance YTD/2011: -7% / 12%

Is The Yield Worth It?: Verizon has paid a cash dividend to shareholders every year since 1984 and has increased its dividend payments for seven consecutive years. With strong cash flow, a low level of debt, and a position of pricing power, this should be a steady dividend yielding stock for the long-term.

-- Written by Lindsey Bell in New York.

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