Local investors typically love their dividends, with many looking for the companies and shares offering the biggest yields.

Big dividend yields can be an incredibly attractive feature for a stock, and one well worth investigating, so long as the dividend yield on offer is sustainable. Indeed, this is where investors can sometimes get burned, by buying shares in companies offering high dividend yields, only to see them tumble before their very eyes.

Here are 10 ASX 200-listed companies that have high trailing dividend yields, followed by a look at whether they are worth your time and money.

Company Market Cap ($ million) Trailing Dividend Yield
Genworth Mortgage Insurance Australia (ASX: GMA) 1,375.3 21.8%
Nine Entertainment Co Holdings Ltd (ASX: NEC) 908 9.6%
FlexiGroup Limited (ASX: FXL) 647.8 9.3%
Spotless Group Holdings Ltd (ASX: SPO) 1,350.9 8.9%
Cromwell Group (ASX: CMW) 1,787.4 8.3%
National Australia Bank Ltd. (ASX: NAB) 63,453.7 8.1%
Australia and New Zealand Banking Group (ASX: ANZ) 67,147.9 7.8%
Orica Ltd (ASX: ORI) 4,611.6 7.8%
Seven West Media Ltd (ASX: SWM) 1,545.5 7.8%
Bank of Queensland Limited (ASX: BOQ) 3,814.9 7.6%

Data provided by S&P Global Market Intelligence

Indeed, all of those dividends appear very appealing, especially considering the low interest rate environment. Australia’s cash rate is currently stuck at 1.75%, and many economists think it will fall even lower as early as next month.

Is Genworth’s 21.8% yield sustainable?

However, investors need to question whether a trailing dividend yield of 21.8%, as offered by Genworth Mortgage Insurance Australia, is actually sustainable. If it were, you can be sure that other investors would have bought in by now, forcing that yield to a figure much lower than it is today.

Sure enough, a quick glance at the company’s annual report shows that it has paid a number of special dividends to shareholders in recent times, which have inflated the trailing dividend yield. What’s more, according to Yahoo! Finance, analysts are predicting a decline in earnings per share over the next couple of years while tougher lending restrictions among the big four banks could also dent Genworth’s growth prospects.

How about the banks?

Two of the names that stand out the most, of course, are NAB and ANZ Bank. Historically, investors would likely have snapped up these two shares had they offered such a yield, but investors are approaching them more cautiously now.

Indeed, the banks are being forced to improve their capital reserves as a safeguard against a potential economic downturn. Neither bank lifted their dividends at the most recent earnings announcement, while there is a fear they could both be forced to cut dividends to shareholders in the future. Needless to say, their yields are very attractive right now, but investors do need to weigh up the possibility of tougher regulations and a cut to dividends.

The best dividend shares

Although each of the 10 companies mentioned above offer monstrous trailing dividend yields, I think there are better dividend shares which don’t actually feature on that list. Although their yields might be lesser, I consider them more likely to sustain and even grow their dividends over time, which is what long-term investors should really be focused on.

One company that may be worth checking out is Transurban Group (ASX: TCL). Although the toll road operator’s shares aren’t necessarily cheap, the company itself still has room to grow over the coming years.

Meanwhile, blue chip pair Wesfarmers Ltd (ASX: WES) and Telstra Corporation Ltd (ASX: TLS) are worth a look for more conservative investors, while Retail Food Group Limited (ASX: RFG) offers the potential for growth through capital appreciation as well as stronger dividends.

If you are interested in quality dividend shares, then I would also suggest taking a look at this top dividend share. A strong yield and potential share price gains make this a great investment idea.

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Motley Fool contributor Ryan Newman owns shares of Retail Food Group Limited. The Motley Fool Australia owns shares of Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.