While the S&P 500 index is up about 11% on the year since Jan. 1, many investors are skeptical about whether the run can continue. From uncertainty related to consumer confidence to interest rates to overheating tech stocks, there’s skepticism that Wall Street has reliably returned to growth mode.
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That has led some investors to seek out a bit of safety in dividend stocks. But it’s worth noting that high-yield dividend stocks sometimes can also be high-risk — so make sure you know what you’re getting into.
The following stocks are the nine highest dividend-paying stocks in the S&P 500 index at present. That means they offer generous yields of at least 7% each, and all have significant market values like the other large-cap stocks in that index. Of course, part of the reason their yields are all so large is because they all seem to be facing some unique troubles lately that have weighed on share prices.
If you’re not afraid of the risk, however, the prospect of big-time yield may be appealing. All investors should do their own research, but if you’re looking for dividend-paying stocks, this list may be a good place to start:
| S&P 500 dividend stock | Trailing dividend yield (as of June 9 close) |
| AT&T Inc. (ticker: T) | 7% |
| Boston Properties Inc. (BXP) | 7.2% |
| Verizon Communications Inc. (VZ) | 7.4% |
| KeyCorp (KEY) | 7.7% |
| Lincoln National Corp. (LNC) | 7.8% |
| Altria Group Inc. (MO) | 8.3% |
| Coterra Energy Inc. (CTRA) | 8.6% |
| Pioneer Natural Resources Co. (PXD) | 11.3% |
| Devon Energy Corp. (DVN) | 9% |
AT&T Inc. (T)
Communications icon AT&T has had an interesting run in the last few years, in part because it spun out media-related operations as part of its stake in what is now Warner Bros. Discovery Inc. (WBD) and saw a resulting reduction in both its market value and its dividend payout. The accounting tricks caused skepticism among some investors, and things weren’t helped by an April earnings report that prompted its worst market decline since 2000 and then a more recent report that satellite provider Dish Network Corp. (DISH) may be teaming up with Amazon.com Inc. (AMZN) to offer wireless services and compete with current market share leader AT&T. Despite declines, however, the dividend remains very reliable and sustainable if you’re interested in long-term income beyond short-term pressures.
Trailing dividend yield: 7%
Boston Properties Inc. (BXP)
Though Boston is in the name, this real estate firm is much bigger than one city, ranking as the largest publicly held developer of “Class A” office properties in the United States. This term covers top-tier commercial real estate that can compete for prestigious clients — and command above-average rents as a result. BXP focuses primarily on five in-demand urban markets: Boston, Los Angeles, New York, San Francisco and Washington, D.C. With more than 50 million square feet across roughly 200 properties, it has the footprint to provide potentially generous dividends. But in the wake of recent work-from-home trends along with rising rates increasing borrowing costs for new projects, shares have dropped significantly in the last year or two, so there’s uncertainty here to consider before investing.
Trailing dividend yield: 7.2%
Verizon Communications Inc. (VZ)
Verizon provides wireless services, data connections and business communications services across the United States. At roughly $150 billion in market value, it is the largest of the “big three” wireless providers in the nation, and is second only to Comcast Corp. (CMCSA) when it comes to major domestic telecom companies. There’s admittedly not a ton of growth given the market saturation, but VZ is entrenched and reliable — and telecom generally has a wide moat that prevents competition or disruption. That means its generous dividend of 65.25 cents per quarter looks pretty reliable — and at just over half of earnings per share at present, ripe for potential increases even if operations don’t expand significantly in the years ahead.
Trailing dividend yield: 7.4%
KeyCorp (KEY)
Regional bank KeyCorp started 2022 at around $25 a share, but slumped steadily last year amid the volatility on Wall Street. Then, it was caught up in 2023’s volatility in the wake of Silicon Valley Bank’s collapse back in March. KeyCorp has a dividend that is only about half of total projected profits, so if it manages to muddle through then it will be among the highest-yielding stocks on Wall Street. Even after the declines, it remains one of the 100 largest financial institutions on Wall Street, at nearly $10 billion in market value, so it’s not like this S&P 500 component has fallen completely out of relevance despite recent uncertainty.
Trailing dividend yield: 7.7%
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Lincoln National Corp. (LNC)
Lincoln National is one of the smaller stocks on this list at just $4 billion, and as a midsize financial stock it lacks some of the flash that the megabanks offer to dividend investors. However, the insurance- and benefits-products focus of LNC does provide a bit of reliability that can’t be found in cyclical products, such as consumer or business loans.
Investors have nevertheless punished LNC in 2023, thanks to a “loss” of more than $2 billion posted in the third quarter of 2022 after a review of its reserves, deferred expenses and other issues. On top of that, LNC also got dinged for holding unsecured debt related to the defunct Silicon Valley Bank.
Shares have slumped, boosting the yield of Lincoln National significantly as dividends have remained constant at 45 cents a share. There’s no guarantee what the future holds, but the yield based on the current situation makes LNC one of the highest-paying dividend stocks in the S&P 500 right now.
Trailing dividend yield: 7.8%
Altria Group Inc. (MO)
From Marlboro cigarettes, Black & Mild pipe and cigar products, and smokeless tobacco like Copenhagen and Skoal, tobacco giant Altria has a host of products that may be unhealthy but nevertheless see very reliable demand. What’s more, that revenue tends to flow in regardless of the broader economic environment or consumer spending trends. This has allowed the company to record its 54th consecutive year of dividend increases — and considering these increases tend to come every September, the next few months could mean 2023 forms yet another link in that chain. This track record, coupled with a yield that is about five times the typical S&P 500 component, makes this dividend stock worth a look and one of the most generous payers in the entire index.
Trailing dividend yield: 8.3%
Coterra Energy Inc. (CTRA)
Independent oil and gas firm Coterra primarily focuses on the Marcellus shale formation around the Appalachian Basin. Its base dividends have moved higher in recent years. It has a unique dividend structure with a fixed payout plus a variable special dividend on top of that based on operational performance.
Specifically, CTRA was paying a fixed dividend of 12.5 cents per share at the end of 2021 before increasing that to 15 cents per share quarterly across 2022 and now 20 cents quarterly this year. Its special dividend has ranged from 17.5 to 53 cents during that period.
The growing base dividend should give investors confidence that they will indeed get some income here, but the trailing yield may not be their realized payday depending on market conditions.
Trailing dividend yield: 8.6%
Pioneer Natural Resources Co. (PXD)
Though regularly atop the list of S&P 500 dividend stocks, Pioneer is good example of the risk that comes with chasing trailing yield. As an energy exploration firm, its dividends are irregular based on how much oil it brings to market and what a barrel of crude costs in a given month. By way of example, PXD paid $4.61 per share in dividends back in November. Then in March, that dividend dipped to just $1.10 per share — but in May, it jumped back to $2.09. It’s hard to know what the future holds, but the mammoth yield based on the last 12 months of distributions may make the payouts worth the risk for income-hungry investors.
Trailing dividend yield: 11.3%
Devon Energy Corp. (DVN)
Devon is an Oklahoma-based energy company that drills for oil and natural gas, and has an even riskier dividend outlook than the aforementioned Pioneer. It had a pretty good run in 2022, gaining about 40% in a challenging year on Wall Street, and paid out a pretty penny along the way. Its dividend distributions have stepped down steadily since then, however. Consider that it paid a generous $5.17 in dividends last year, including a quarterly high of $1.55 paid in September, but its two dividends this year have been just 89 cents in March and 72 cents in June — tracking a little better than $3 on the year.
There’s no guarantee that this trend will continue, so maybe Devon’s next payday will get investors back to what they were used to last year. There’s also a chance that distributions may continue to decline, however, so keep in mind that the trailing yield is not a reflection of guaranteed payouts going forward.
Trailing dividend yield: 9%
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9 Highest Dividend-Paying Stocks in the S&P 500 originally appeared on usnews.com
Update 06/12/23: This story was previously published at an earlier date and has been updated with new information.
