The average dividend yield of the S&P 500 is around 2.00 percent. According to data from November 2014, there are more than 200 enterprises with yields that are much higher than the average. The top five highest and lowest dividend yields from the S&P 500 are highlighted below.
What are the highest paying dividend stocks in the S&P 500?
1. AT&T (American Telephone and Telegraph Company) (T)
AT&T’s dividend yield is quite appealing. However, the telecom company has recently received the wrong kind of attention from government officials. The Securities and Exchange Commission (SEC) sued AT&T earlier this year for allegedly disclosing insider information to multiple Wall Street analysts before of a significant earnings announcement in 2016. When the company’s earnings were properly presented to the public, the analysts dropped their aggregate revenue predictions, allowing the company to beat consensus expectations. While the lawsuit is unlikely to affect AT&T’s ability to pay its dividend or earn money from its large customer base, it may cause some unwelcome turbulence for investors in the near term. For the time being, conservative investors should avoid the stock.
Lumen Technologies is number two (LUMN)
Lumen is a wireline telecommunications company that specializes in fiber-based services (it was formed by merging CenturyLink and Level 3 Communications). It’s also shifting its focus to digital applications and investments in “4th Industrial Revolution” technologies like Edge Cloud and other platform-based solutions. Through its Quantum Fiber brand, the corporation reaches more than 2.4 million residences, with over 400,000 new houses added in 2020 alone. Lumen, on the other hand, has a large debt load, despite its commitment to paying down debt, lowering interest costs, and strengthening its balance sheet. Lumen’s CEO stated again that the company intends to return more capital to shareholders in the next quarters by investing in expansion and paying dividends. While its profits growth prospects aren’t as bright as those of some of the other companies on our list, profitability appears to be stabilizing, and the de-leveraging approach appears to be paying off. If you can handle volatility, it’s worth a look.
Altria Group is number three on the list (MO)
Altria is well-known as one of the world’s largest tobacco and tobacco-related product manufacturers. With a current annual payout of $3.60 per share, the corporation is also regarded for being one of the most consistent high-dividend payers among U.S.-based blue-chip companies. Indeed, in the last ten years, Altria’s dividend payouts have nearly tripled. While some investors are concerned that Altria’s cigarette and tobacco business will be hampered by changing consumer preferences, the company’s investments in increasingly popular vaping and cannabis products, as well as the FDA’s recent approval of e-cigarette product marketing for the first time, should ensure revenue growth in the future.
Kinder Morgan is number four on the list (KMI)
Kinder Morgan is one of North America’s largest energy infrastructure firms, owning or controlling roughly 83,000 miles of oil and gas pipelines. However, Kinder’s long-term growth strategy has been pushed to rethink due to a statewide move to renewable energy. Instead of focusing on expanding its pipeline, the business has stated that it will gradually shift its focus to purchasing existing assets in the alternative energy industry, as well as maximizing its natural gas assets. Kinder isn’t one of the best-performing energy companies right now, but we believe its track record of adapting to major changes in the industry should ensure its dividend stability.
ONEOK is number five (OKE)
With operations in Kansas, North Dakota, and Texas, ONEOK is a leading natural gas midstream corporation in the United States. Following the collapse of crude oil and natural gas prices a year ago, OKE faced substantial hurdles in its business. However, OKE had been in a similar scenario before, most recently during the 2015-16 energy sector crisis, and the company has a track record of surviving even the most difficult economic conditions. Now fast forward to today, and OKE is making money once more, thanks to rising oil prices. Its dividend payouts have also been steadily increasing over the last few years, with a quarterly payout of 94 cents per share currently. Now that the oil patch’s troubles have passed, OKE’s stable dividend and high yield make it an enticing target for income-oriented investors.
Williams Companies, No. 6 (WMB)
Williams Companies is a natural gas processing and transportation company established in the United States, with other assets in petroleum and power generating. Williams’ cash flow has been remarkably consistent in recent years, and increased energy prices are expected to raise earnings even more in the future. The company is aggressively increasing its activities in the northeastern and southwest regions of the United States, which should allow it to continue paying a high dividend (current annual dividend $1.64 per share). It appeals to us.
7. PPL Corporation (PPL)
PPL is a Fortune 500 utility firm that serves more than 10 million consumers in the United States and the United Kingdom, though it is currently selling its utility business in the United Kingdom. It has a 21-year track record of dividend increase and now pays a forward divided-per-share of $1.66. While PPL’s dividend growth rates have slowed, the company’s earnings outlook is likely to be robust enough to maintain its high dividend distribution in the future. After selling its U.K. energy distribution network operator, there has also been speculation that the corporation could become a takeover target. It isn’t the best performer in terms of capital gains, but its dividend consistency is commendable.
Exxon Mobil is the eighth largest oil company in the world (XOM)
Exxon, like the rest of the energy sector, experienced substantial hurdles last year when oil prices fell. Exxon’s stock plunged 54 percent from high to trough during the 2020 pandemic-driven fall in the first three months of the year. Despite the drop in the stock price, the company’s management decided to keep the 87 cents-per-share quarterly dividend. However, it failed to increase the dividend in the calendar year 2020, breaking an 18-year streak of dividend increases. Nonetheless, Exxon is still on the Dividend Aristocrats list as of this writing, with a 37-year track record of increasing annual payouts, despite a dividend payment ratio of 154 percent at one point.
Philip Morris (nine) (PM)
Despite dwindling cigarette sales in the United States and other industrialized countries, tobacco giant Philip Morris is collaborating with Altria (described above) to develop heated tobacco products that release fewer chemicals than traditional cigarettes, reducing health concerns. Philip Morris’ heated tobacco products have seen a considerable boost in sales, putting the business on track to meet its long-term objective of replacing traditional cigarette sales with lower-risk alternatives. The company’s relatively inexpensive valuation, as well as its long-term track record of progressively growing the dividend, are both appealing.
Iron Mountain (number 10) (IRM)
While cybersecurity is hot right now, some businesses prefer to preserve documents the old-fashioned way for safer storage, which is where Iron Mountain comes in. Iron Mountain is best known for the offsite record storage service it provides businesses to keep paper documents safe. You may have seen the company’s mobile paper shredding trucks driving around your city, but it is best known for the offsite record storage service it provides businesses to keep paper documents safe. It has over 95 percent of Fortune 1000 firms as customers, a 98 percent customer retention rate, and more than 1,430 locations throughout the world. Iron Mountain has increased its dividend consistently in recent years, and following a good second-quarter report, the company’s board of directors declared a decade-high quarterly dividend of 62 cents per share. Analysts expect the high dividends to continue in the future.
That concludes the top ten dividend-paying stocks in the S&P 500 today. I highly recommend subscribing to our Cabot Dividend Investor advice, where head analyst Tom Hutchinson has a portfolio full of dividend-paying stocks that give substantial yields and excellent share price rise, independent of yield.
What is a good average dividend yield?
Some investors buy companies for dividend income, which is a conservative equity investment strategy if dividend safety and growth are considered. A healthy dividend yield varies depending on interest rates and market conditions, but a yield of 4 to 6% is generally regarded desirable. Investors may not be able to justify buying a stock just for the dividend income if the yield is lower. A greater yield, on the other hand, could suggest that the dividend isn’t safe and will be lowered in the future.
Is 7% a good dividend yield?
Dividend rates of 2% to 4% are generally regarded excellent, and anything higher than that might be a terrific buy—but potentially a risky one. It’s crucial to look at more than just the dividend yield when comparing equities.
Does Vanguard S&P 500 pay dividends?
The dividend cover is roughly 1.0, and there are normally four dividends per year (excluding specials). Vanguard S&P 500 UCITS ETF was forecasted with a 24 percent accuracy by our premium tools. Your Vanguard S&P 500 UCITS ETF account is set up to receive notifications.
Can you get rich from dividend stocks?
Investing in the greatest dividend stocks over time can make you, your children, and/or grandkids wealthy. Investing small amounts of money in dividend stocks over time and reinvesting the dividends can make many investors wealthy, or at least financially secure.
What is a bad dividend yield?
The current average dividend yield on the S&P 500 is 1.80%. Between 2008 and 2018, the average annual growth rate was roughly 2%. This implies that a dividend yield of 2% or higher would be deemed good, or at the very least above average.
And the best-yielding do much better, with yields typically ranging from 4% to 5%. To be on the safe side, a top rate of roughly 6% makes sense: It usually indicates that the company has reached a point of growth where it can generate actual money without the use of debt or other self-destructive means. Solid blue-chip stocks frequently trade at or near that level.
So, where do you look for these high-yielding dividend-payers? Some of the high-yielding firms, as well as their expected dividend yields, may be found in the following industries:
- Companies that provide internet, phone, cable, and satellite services are known as telecommunications companies. Verizon (VZ) is a venerable dividend-paying telecommunications stock (just over 4 percent ).
- Companies that generate renewable and non-renewable energy are referred to as energy companies. Chevron (CVX) is a good example of non-renewable energy (6.29 percent ). Hannon Armstrong (HASI) is a renewable energy company (2.6 percent ).
- Medical services and equipment, medications, and insurance are all examples of healthcare. Pfizer (PFE) is one of the most reliable citizens (4.23 percent and increasing).
- Utilities are businesses that offer services such as water, sewage, power, dams, and natural gas. If you’re looking for a great investment, go no farther than Edison International (EIX) (4.21 percent ).
- Food, beverage, consumable household, and personal product manufacturers are examples of consumer staples. Proctor and Gamble (PG) is a role model for this industry, with a small but stable 2.12 percent share price.
- Most investors prefer to participate in real estate investment trusts (REITs), which are businesses that own, operate, or finance income-producing assets. National Retail Properties (NNN) is a great example (5.9%).
Do Tesla pay dividends?
Tesla’s common stock has never paid a dividend. We want to keep all future earnings to fund future expansion, so no cash dividends are expected in the near future.
What dividend yield is too high?
The safety of a dividend is the most important factor to consider when purchasing a dividend investment. Dividend yields of more than 4% should be carefully studied, and yields of more than 10% are extremely dangerous. A high dividend yield, among other things, can signal that the payout is unsustainable or that investors are selling the shares, lowering the share price and boosting the dividend yield.
What’s a good PE ratio?
The higher the P/E ratio, the more you pay each dollar of earnings. From a pure price-to-earnings standpoint, a high PE ratio is undesirable for investors.
A higher P/E ratio indicates that you will pay more for a share of the company’s earnings.
So, what is a decent price-to-earnings (P/E) ratio for a stock? A “good” P/E ratio isn’t always a high or low ratio in and of itself.
A higher PE ratio than that may be regarded bad, while a lower PE ratio could be considered better. The market average P/E ratio now runs from 20 to 25, thus a higher PE ratio above that could be considered bad, while a lower PE ratio could be considered better.
When compared to the industry average or historical average, a high P/E ratio indicates that you are paying more for each dollar of earnings, but it also indicates that investors expect the firm to grow earnings quicker in the future, whether compared to its competitors or its own prior growth.
P/E Ratios Are Only Useful Compared to a Benchmark
A P/E ratio of 10 may be typical for a utility firm, but it may be unusually low for a software company.
The industry PE ratios come into play at this point. What are the company’s expectations in comparison to its key peers and competitors?
A company’s P/E ratio can be compared to its industry or previous P/E ratios to answer this question.
A stock market index, such as the S&P 500, can be used to determine if a company is overvalued or undervalued in comparison to its peers.
A P/E ratio can also be compared to the industry average P/E, such as comparing McDonald’s to other fast food restaurants’ average P/E ratios.
We can see how comparing PE ratios to benchmarks can help us assess whether a PE ratio is comparatively good or poor in this example from McDonalds (NYSE: MCD).
Does Dow Jones pay well?
What is the annual salary of Dow Jones? The average annual compensation at Dow Jones ranges from $41,831 for a Customer Service Associate to $288,507 for a Vice President.