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The stock market offers few certainties, but the outperformance of high-quality dividend stocks over the long run, relative to their non-dividend-paying counterparts, tends to be about as close to a certainty as you'll get.

The strong long-term performance of dividend stocks probably shouldn't come as a surprise given the fact that most companies paying a dividend are profitable, have a reasonably clear outlook, and have time-tested business models. In other words, dividend stocks act like beacons of profitability to lure income-seeking investors. Best of all, these payouts can be reinvested into more shares of dividend-paying stock through a dividend reinvestment plan, or DRIP, thereby compounding your wealth over time.

But dividend stocks have a dark side as well: The higher the yield, more often than not, the greater the risk. Since yield is a function of payout and share price, a rapidly declining share price that's caused by a failing business model can give the false impression to income investors that they're going to be rolling in the dough.
There are some ultra-high-yield dividend stocks with yields in excess of 10% that should rightly be attractive to income investors. But there are plenty that look downright dangerous. Here are two ultra-high-yield dividend stocks whose payouts look to be on life support and may soon be completely eliminated.


BP Prudhoe Bay Royalty Trust: 20.5% dividend yield

Keeping in mind that the market holds nothing to be certain, there's a very good possibility that BP Prudhoe Bay Royalty Trust (NYSE: BPT) is going to disappoint income investors sooner rather than later -- and it has nothing to do with the price of crude.

As the company's name implies, BP Prudhoe Bay is a trust that owns a royalty interest in BP's oil production in Prudhoe Bay, Alaska. If the price of West Texas Intermediate (WTI) oil rises, then the trust makes more money, whereas it generates less royalty income if the price of WTI falls. Once the relatively minimal operating expenses of the trust are accounted for, the remaining earnings are passed along to shareholders in the form of a dividend. The catch is that BP Prudhoe Bay only receives a royalty on up to the first 90,000 barrels of oil per day, with anything in excess of this amount not counting toward its royalty.

Even though BP Prudhoe Bay is limited by the number of barrels on which it can generate interest, the trust has had little issue generating big-time dividends for its investors, with 2008 being its best year (it paid out $11.71 per share). Even now, the trust sports a yield of better than 20%, which presumably would rise if the price of WTI rose significantly.

But here's the problem: If production at BP's Prudhoe Bay oil field drops below feasible levels to operate the trust, it'll be liquidated and the dividends will cease entirely. Essentially, the trust would no longer have any value. That would mean any investors who are buying into BP Prudhoe Bay Royalty Trust today would need the value of the dividends received to outpace the company's current share price in order to ensure a complete payback and investment gains, not including the tax implications of the dividends they'll receive. But the chance of the trust surviving long enough for that to happen appears slim.
According to BP Prudhoe's 2018 annual report, production is no longer expected to be feasible after 2022. Keeping in mind that this figure has changed a number of times over the 30 years the trust has been in operation, this only leaves perhaps 14 more quarterly payouts before the trust liquidates. While we can't know with any certainty the precise end date of the BP Prudhoe Bay Royalty Trust, what is fairly certain is that we're a lot closer to the end than the beginning. That makes this ultra-high-yield dividend a strong candidate to be eliminated in the not-so-distant future