Dividends, as well as share buy-back programs, can be lucrative for shareholders of a cash generating company. Apple (NASDAQ:AAPL), for example, is a cash cow that’s struggling in terms of equity performance (and innovation), but the tech giant offers a nice dividend and returns tons of cash back to shareholders in the former of share repurchases. We can see enticing — but dangerous — high-yield trap stocks serviced throughout a multitude of industries, specifically ones generating a significant amount of free cash flow. Tech is one of those industries, but the oil and gas industry has also relied on heavily upon dividends and share repurchases to keep shareholders interested onboard.

However, there is risk in just buying into an attractive dividend yield. A quarterly dividend may not mean much if the share price of the dividend bearing stock has faced headwinds in the current market. Moreover, if a company is offering a juicy dividend now, does not imply it will continue to do so.

Below are three high-yield trap stocks that have not been worth the investment.

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Peoples Financial Services (PFIS)

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Peoples Financial Services (NASDAQ:PFIS) is a holding company for Peoples Security Bank and Trust Company, which provides both retail and commercial banking services. In essence, Peoples Financial Services functions as a community bank. Its regional reach covers much of the state of Pennsylvania with sparse coverage in New Jersey and New York. The PA-based community bank boasts a dividend yield of just above 4% and pays out a 0.41/share dividend every quarter.

In September 2023, Peoples Financial Services announced a merger with FNCB Bancorp, another community bank with extensive coverage in Northeastern Pennsylvania. As the merger continues to digest, PFIS expects the related synergies to boost EPS by 59% and dividends by 51%.

Investors will have to decide whether or not they have the patience. Peoples Financial Service’s reported its Q1 earnings report for fiscal year 2024, and revenue along with net income declined. Because PFIS is a community bank that has to compete with large institutions, it has had to offer higher deposit rates, effectively cutting into the banks net margins. So far, PFIS has seen shares plummet nearly 20% on a YTD-basis.

Kearny Financial (KRNY)

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Founded in 1994, Kearny Financial (NASDAQ:KRNY) is the other full-service community to make this list. The banking corporation offers services in New Jersey, Brooklyn, and Staten Island. These financial services and products include deposit accounts and residential as well as nonresidential real estate loans. Based on its current share price, Kearny’s dividend yield is around 7.8%. The company issues an 11 cent/share quarterly dividend.

Despite a generous dividend, holding KRNY comes with a certain risk. Recent Q1 financial figures show loans receivables and deposits declining in the single digit percentage points from the same period in 2023. Moreover, the community bank continues to experience net interest margin compression for the same reasons as Peoples Financial Services.

KRNY share price has fallen more than 38% on a YTD basis and by almost 60% if we look at share performance over the past five years. That is all to say, even though KRNY offers a relatively high dividend, its lackluster share price performance continues to be a burden on overall shareholder returns.

Eagle Bancorp (EGBN)

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Eagle Bancorp (NASDAQ:EGBN) is another community bank headquartered in Maryland and maintains extensive operations throughout the Washington D.C. metropolitan area. The community bank has built out extensive commercial and consumer lending products, which include everything from mortgage loans for homebuyers to working capital and equipment purchase loans for enterprises. Eagle Bancorp boasts the highest dividend yield of any other entry on this list at just over 10%. The banking corporation issues its dividend of 45 cents/share on a quarterly basis.

Unfortunately, Eagle Bancorp continues to suffer from declining deposits and loan assets. In its first quarter results for 2024, the bank also reported meaningful upticks in its non-performing assets (NPAs) as a portion of total assets from the end of Q4 2023. The firm’s net margins have also faced compression with consumers demanding more on their deposits.

EGBN share price has slumped 41.6% on a YTD basis.

On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.

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