9 Highest Dividend-Paying Stocks in the S&P 500

These companies are the highest-yielding dividend stocks in the S&P 500.

Dividend stocks can be an excellent option for investors looking for regular income. These stocks regularly pay out a portion of the company’s cash flow directly to investors. The best dividend stocks even raise their payouts over time as the companies and their profits grow. Reinvesting these dividends can help investors compound returns. Unfortunately, dividends are only as good as the companies paying them, making stock selection critical for dividend investors. It’s been a difficult year in the market, but holders of these nine highest dividend-paying S&P 500 stocks have at least received their regular income payments.

Pioneer Natural Resources Co. (ticker: PXD)

Pioneer Natural Resources is an oil and gas exploration and production company that operates primarily in the Permian Basin in West Texas. CFRA Research analyst Stewart Glickman says surging oil prices have boosted Pioneer’s profitability, and the company has successfully increased production at its Permian Basin properties at low and improving well costs. Glickman says Pioneer’s recent acquisition of Parsley Energy helped improve the company’s reserve life. Even after gaining 31.8% this year as of Sept. 9, Glickman says Pioneer shares still have valuation upside in addition to their tremendous dividend income potential. CFRA has a “buy” rating and $283 price target for PXD stock, which closed at $239.62 on Sept. 9.

Dividend yield (trailing 12 months, or TTM): 10%

Lumen Technologies Inc. (LUMN)

Lumen Technologies is a U.S. telecommunications company that changed its name from CenturyLink in 2020. In 2021, the company announced a $2.7 billion sale of its Latin American operations to Stonepeak and a $7.5 billion sale of its traditional telecom business to Apollo Global Management Inc. (APO). Lumen shares are down about 47% overall in the past five years to Sept. 9, but Morningstar analyst Matthew Dolgin says the stock is “materially undervalued” and has potential for “significant cash generation” for investors willing to remain patient for another couple of years. Morningstar has a “buy” rating and $16 fair value estimate for LUMN stock, which closed at $9.97 on Sept. 9.

Dividend yield (TTM): 10%

Altria Group Inc. (MO)

Altria is one of the world’s largest tobacco companies. Morningstar analyst Philip Gorham says the cigarette market is dealing with secular headwinds, but Altria remains a relatively defensive investment in an inflationary environment. For now at least, Altria is offsetting the impact of falling cigarette volumes by raising prices. While volume, mix and market share pressures will likely continue in the near term, Gorham says Altria is no longer a pure-play cigarette company and its premium positioning should help it maintain operating margins above 50% in the long term. Morningstar has a “buy” rating and $52 fair value estimate for MO stock, which closed at $45.57 on Sept. 9.

Dividend yield (TTM): 7.9%

Vornado Realty Trust (VNO)

Vornado Realty Trust is an office retail real estate investment trust, or REIT, that specializes in redeveloping office towers, retail locations and urban central business district office properties. Morningstar analyst Suryansh Sharma says delays in workers returning to offices continues to weigh on Vornado’s numbers, even as physical attendance to restaurants, movie theaters and other businesses has returned to pre-pandemic levels. While Vornado has valuation upside at current levels, Sharma says the company’s potential for long-term growth may rely heavily on how much of the shift to remote work will be permanent. Morningstar has a “buy” rating and $38 fair value estimate for VNO stock, which closed at $27.70 on Sept. 9.

Dividend yield (TTM): 7.7%

Devon Energy Corp. (DVN)

Devon Energy is a U.S. oil and gas exploration and production company that has taken advantage of soaring energy prices since Russia invaded Ukraine. Devon’s stock is up 55.5% in 2022 as of Sept. 9, making it the top-performing stock on this list. In addition to boosting its dividend, excess cash flow helped Devon fund its recent $865 million buyout of RimRock Oil and Gas and $1.8 billion acquisition of Validus Energy. Bank of America analyst Doug Leggate says the deals have helped improve Devon’s asset portfolio. Bank of America has a “neutral” rating and $71 price target for DVN stock, which closed at $68.51 on Sept. 9.

Dividend yield (TTM): 6.8%

AT&T Inc. (T)

AT&T is a diversified telecom, media and technology company. Bank of America analyst David Barden says AT&T’s core business metrics in the second quarter were impressive, but they were overshadowed by cautious management commentary on inflation, accelerating declines in Business Wireline sales and lengthening consumer payment cycles. Barden says AT&T has clear subscriber momentum following its divestment of WarnerMedia and expects AT&T’s remaining core businesses to continue to generate the cash flow needed to support its dividend in a difficult environment. Bank of America has a “buy” rating and $25 price target for T stock, which closed at $17.03 on Sept. 9.

Dividend yield (TTM): 6.5% (adjusted following the spinoff and dividend cut)

Simon Property Group Inc. (SPG)

Simon Property Group is a REIT that owns and operates primarily regional and outlet malls, as well as community and lifestyle centers. Unfortunately, Simon investors haven’t gotten the post-pandemic recovery they were hoping for so far in 2022. The stock is down 35.1% year to date as of Sept. 9, making it the worst performer on this list. Bank of America analyst Jeffrey Spector says Simon’s tenant sales growth was better than expected in the second quarter, and the company’s occupancy gains and record-low occupancy costs are further reasons for optimism. Bank of America has a “buy” rating and $123 price target for SPG stock, which closed at $103.77 on Sept. 9.

Dividend yield (TTM): 6.3%

Verizon Communications Inc. (VZ)

Verizon Communications is the largest U.S. wireless carrier. Morningstar analyst Michael Hodel says Verizon is focused on its traditional wireless business, expanding its fiber optic networks deeper into major metro areas and acquiring a large amount of additional wireless spectrum in 2022. In addition, Verizon is aggressively spending to put its recently gained spectrum to use. Hodel says Verizon investors can expect only modest long-term sales growth but can rely on consistent dividend payments and cash flow even in a highly competitive environment. Morningstar has a “buy” rating and $59 fair value estimate for VZ stock, which closed at $42.24 on Sept. 9.

Dividend yield (TTM): 6.1%

Kinder Morgan Inc. (KMI)

Kinder Morgan is one of the largest U.S. midstream energy companies and focuses primarily on natural gas and liquids. Kinder Morgan transports 40% of U.S. natural gas volumes and 50% of gas intended for export. Glickman says Kinder Morgan’s pivot toward a more conservative strategy during the energy downturn back in 2015 set the stage for its impressive handling of the 2020 crisis, leaving the company better positioned to capitalize on the current boom. Glickman says gas shortages in Europe could drive significant U.S. export demand. CFRA has a “neutral” rating and $20 price target for KMI stock, which closed at $18.31 on Sept. 9.

Dividend yield (TTM): 6.0%

9 highest-paying dividend stocks in the S&P 500:

— Pioneer Natural Resources Co. (PXD)

— Lumen Technologies Inc. (LUMN)

— Altria Group Inc. (MO)

— Vornado Realty Trust (VNO)

— Devon Energy Corp. (DVN)

— AT&T Inc. (T)

— Simon Property Group Inc. (SPG)

— Verizon Communications Inc. (VZ)

— Kinder Morgan Inc. (KMI)

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