So far, the S&P 500 continues to defy gravity with a roughly 7% return year to date in 2023. But things are anything but rosy on Wall Street right now. Just look at your favorite news site and you’re sure to see fears of a potential government shutdown and debt default this summer, talk of financial sector fragility, weakening consumer sentiment, and disruptions caused by higher interest rates.
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This rising uncertainty may mean that investors return to a “risk off” approach in the months ahead, relying on stable blue chips and dividend payers to weather any potential trouble. And if you’re personally looking to add a bit of income potential to your portfolio via high-yield stocks, then one good place to start is a list of the highest-paying dividend stocks in the S&P 500 right now.
The following nine stocks all offer yields of more than 8% right now, which is more than four times the typical dividend of S&P 500 companies at present.
Of course, these are not risk-free investments. All stocks carry risk — and some of these names in particular carry an elevated amount of uncertainty. So don’t be fooled by dividend yields alone, and make sure to do your research before booking any new trades.
Dividend Yield: How to Calculate It and Why It Matters
Dividend yield is a simple but helpful calculation, derived by taking a company’s dividends per share over a yearlong period and dividing it by the stock’s share price to figure out how much of your seed money will be delivered back to you over a year’s time. For instance, if a company has a $40 share price and pays a dividend of 25 cents per quarter (that’s $1 per year), its dividend yield would be 2.5%.
There are two simple ways for dividend yields to go up, then. The first is for dividend payments to rise, and the second is for share prices to fall. For instance, if the aforementioned company began paying 50 cents a quarter (or $2 a year) it would see its dividend yield double to 5%. However, if it also saw its share price cut in half to $20 but maintained its dividend of $1 annually, the new yield would also be 5%
If you’re bored by this math lesson, simply know this: Rising dividend yields are not always a sign that a company is booming. If dividends are marching higher that is certainly good news, but falling share prices can also lift dividend yield — at least, until a dreaded dividend cut follows those declines.
This is particularly noteworthy in the current environment, where the highest dividend-paying stocks in the S&P 500 as a group have obvious challenges right now. The yields are good, based on a trailing basis. But there are significant risks to be aware of before you dive into pursuing an income stream that may dry up. With that being said, here are the nine highest dividend-paying stocks in the S&P 500:
| Stock | Dividend yield (trailing 12 months) |
| Boston Properties Inc. (ticker: BXP) | 8.3% |
| Altria Group Inc. (MO) | 8.3% |
| Coterra Energy Inc. (CTRA) | 8.3% |
| Comerica Inc. (CMA) | 8.1% |
| Lincoln National Corp. (LNC) | 9.3% |
| KeyCorp (KEY) | 8.5% |
| Devon Energy Corp. (DVN) | 10.1% |
| Newell Brands Inc. (NWL) | 10.5% |
| Pioneer Natural Resources Co. (PXD) | 13.5% |
Boston Properties Inc. (BXP)
A short time ago, Boston Properties seemed like a sure thing for dividend investors. As the largest publicly traded developer and manager of Class A office properties in the United States — meaning the top-tier buildings that are in high demand regions — it seemed a no-brainer to depend on this real estate investment trust, or REIT, for reliable income. Unfortunately, over the last few years we’ve seen a one-two punch that has weighed on BXP via the pandemic-era push for remote work coupled with surging interest rates that have weighed on real estate companies. Shares are a third of where they were to start 2020 as a result, though the trailing dividend yield is admittedly among the best in the S&P 500.
Trailing dividend yield: 8.3%
Altria Group Inc. (MO)
Tobacco products giant Altria Group is the company behind Marlboro cigarettes, Black & Mild cigars, and smokeless tobacco including Copenhagen and Skoal. Founded in 1822, this is one of the oldest and most respected tobacco companies in the world. Though cigarettes are not exactly a growth business, sales are reliable and the stock is a well-run and consistent dividend payer. In fact, MO stock lost a mere 2% last year as the rest of Wall Street melted down. Unlike many of the other troubled financial or energy picks on this list, MO could be the most reliable dividend payer on this list of the top S&P 500 dividend stocks right now.
Trailing dividend yield: 8.3%
Coterra Energy Inc. (CTRA)
Independent oil and gas company Coterra is the first of a few energy stocks on this list. It primarily engages in the exploration and production of oil and natural gas in the Marcellus Shale region of Pennsylvania and the Anadarko Basin in Oklahoma. Last year, high energy prices created windfall profits for many firms like Coterra — and as a result, firms like this one ratcheted up their dividends to share with investors. A more muted environment has caused dividends to dip more recently, but the trailing yield on CTRA still remains elevated. Specifically, shareholders of record on May 25 will get a 20-cent dividend in a few weeks, which is down significantly from 57 cents in March, 68 cents in November, and 65 cents last August. Add that up and you get a generous trailing yield — but a lot of uncertainty about the future payouts for this energy stock.
Trailing dividend yield: 8.3%
Comerica Inc. (CMA)
Down about 50% in just three months, Comerica is one of the more prominent regional banks that has been caught up in recent turmoil across the sector. Those troubles all began with the spring failure of Silicon Valley bank, the third-largest bank failure in U.S. history and the worst since the 2007-2008 financial crisis, and recently has heated up again with some rather stark warnings from banks like PacWest Bancorp (PACW) that saw a significant dip in deposits in early May as bankers lost confidence in the solvency of its operations. Though dividends of $2.84 annually add up to just over a third of total projected earnings for fiscal year 2024, investors have aggressively sold off CMA stock amid the turmoil to drive up its dividend yield significantly.
Trailing dividend yield: 8.1%
[READ: Billionaire George Soros’ 7 Top Stock Picks in 2023.]
Lincoln National Corp. (LNC)
At roughly $3.5 billion in market value, Lincoln National is one of the smaller stocks in the entire S&P 500. The business of LNC is rather boring, including multiple insurance and retirement product businesses in the United States. This was a slow and steady business for many years, but rising interest rates that make traditional savings products more attractive coupled with some specific challenges to Lincoln’s risk management strategies and loss reserves have been unpleasant for shareholders. In May, LNC reported diluted loss per share of $5.37 on total revenue that missed expectations, resulting in a roughly double-digit slump for shares over the last 30 days. That comes after a slump of about 30% in just a session or two last fall after another ugly earnings report. This volatility is definitely concerning, as are the profit shortfalls. But the 45-cent quarterly dividend remains intact, and shares could be a bargain if they stabilize after recent troubles.
Trailing dividend yield: 9.3%
KeyCorp (KEY)
Down about 75% from its early 2022 highs, KeyCorp is another regional bank caught up in recent volatility in the wake of Silicon Valley bank’s collapse. KeyCorp has a dividend that is only about half of total projected profits, but has been caught up in the negativity all the same. It’s still one of the 100 largest U.S. financial stocks despite this, and one of the 15 largest regional banks at almost $9 billion in market value even after these declines. So if you think the negativity is overdone and you’re not afraid of catching a falling knife in this sector, KEY could be a high-income stock to investigate.
Trailing dividend yield: 8.5%
Devon Energy Corp. (DVN)
Devon is an Oklahoma-based energy company that drills for oil and natural gas in the U.S., which resulted in huge payouts a year or two ago as oil prices began to spike. As a result, the trailing yield of DVN is among the best in the S&P 500. However, its recent declaration of a 72-cent dividend payable in June is down significantly from $1.27 per share last year and 89 cents per share back in March. Many energy stocks like this offer volatile payouts, so that fluctuation isn’t particularly unique to Devon. However, it’s worth noting that the annualized yield would drop to about 6% if quarterly payouts stick at 72 cents and stay there for the next 12 months.
Trailing dividend yield: 10.1%
Newell Brands Inc. (NWL)
Consumers may recognize Newell as the company behind a host of familiar products from Rubbermaid storage items to Sharpie and Paper Mate office products to Yankee Candles. Unfortunately, this strange family of sometimes unrelated brands doesn’t make sense to many investors as it doesn’t quite provide the synergies may are looking for in a 21st century consumer goods company. Newell slumped hard in 2021, continued to struggle last year, and is currently sitting on a nearly 70% loss over the last 24 months. While dividends are still technically less than projected profits, some investors are seriously worried after deep sales declines lately. A new CEO was named at the start of 2023, and the new leadership seems to think the high payout is too aggressive: on May 16, the company slashed its quarterly payout by roughly 70% to 7 cents, payable to shareholders of record on May 30.
So while the trailing yield is attractive now, a full year of the new dividend will put the yield at just 3.2%, assuming the May 16 $8.75 closing price.
Trailing dividend yield: 10.5%
Pioneer Natural Resources Co. (PXD)
Once again topping the S&P 500, Pioneer is the highest dividend-paying stock in the index — but with an asterisk. Dividends are irregular, based in large part on how much PXD drills and what the price of oil is, so the trailing dividend is not going to be the exact future dividend. In fact, all four of the firm’s recent distributions have been getting steadily smaller — with its $3.34 declared dividend that’s payable June 21 just a fraction of its recent high of $8.57 per share last September. Still, even if that low figure sticks you will still see a roughly 6.5% annualized yield based on current prices. So this independent oil and gas exploration and production company could be worth a look if you don’t mind the risk and the irregularity of its income stream.
Trailing dividend yield: 13.5%
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9 Highest Dividend-Paying Stocks in the S&P 500 originally appeared on usnews.com
Update 05/17/23: This story was previously published at an earlier date and has been updated with new information.
