The highest dividend-paying stocks in the S&P 500 can be misleading. That’s because, at first glance, these big dividends speak to strong operations and reliable cash flows. How could a stock pay regular and generous dividends without a firm foundation?
Well, history shows that previous dividend payouts are no guarantee of future yield. In fact, a few of the highest dividend-paying stocks in the index don’t currently have enough profits to cover their existing payouts — meaning either they’re doing some creative accounting and relying on debt as a stopgap, or they are about to cut those dividends significantly.
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It’s also worth noting that forward dividend yield is not just a function of payouts but also of share price. The metric is calculated by dividing a stock’s expected annual dividend payouts by its current per-share price — and as that price falls, the yield can rise substantially even if payouts remain flat.
In other words, investors should look at far more than just the headline yield of S&P 500 stocks before diving in headfirst with the expectations of safety or income. The hard reality is that of the 10 stocks on this list, most have suffered declines recently as well as concerns about the sustainability of their payouts going forward. But if you are simply interested in big yields, the following 10 large-cap leaders all offer 5% payouts or better:
| Stock | Forward Dividend Yield* |
| Kraft Heinz Co. (ticker: KHC) | 5.7% |
| United Parcel Service Inc. (UPS) | 6.5% |
| Verizon Communications Inc. (VZ) | 6.6% |
| Healthpeak Properties Inc. (DOC) | 6.6% |
| Alexandria Real Estate Equities Inc. (ARE) | 6.7% |
| Pfizer Inc. (PFE) | 7% |
| Altria Group Inc. (MO) | 7% |
| Conagra Brands Inc. (CAG) | 7.3% |
| LyondellBasell Industries NV (LYB) | 8.7% |
| Dow Inc. (DOW) | 9.9% |
*As of July 16 close.
Kraft Heinz Co. (KHC)
Forward dividend yield: 5.7%
One of the biggest news items on Wall Street this July has been rumors that Kraft Heinz may be considering a breakup — a decade after an ill-executed merger between the two nameplates that resulted in crippling debt and a long-term decline of more than 70% from where it traded shortly after the deal. Not only would such a split be a confirmation that past missteps continue to weigh on KHC, but the breakup also has sparked speculation that Berkshire Hathaway is looking to exit its mammoth 27% stake and KHC is trying to do anything it can to avoid structural negative pressures if and when Berkshire bails out.
KHC’s dividend is nominally about four times that of the broader S&P 500, but keep in mind that 40-cent payout hasn’t budged since 2019 and is a reduced payout from 62.5 cents paid before that date. When a company struggles to find its way, it’s never a good sign, so dividend investors should look carefully at the broader operational issues in this consumer staples stock before latching on to its high dividend yield.
United Parcel Service Inc. (UPS)
Forward dividend yield: 6.5%
Many industrial stocks have been struggling thanks to the widespread uncertainty around U.S. tariffs and trade policy. UPS is similar in that its package volume could be impacted by any crackdown — and in a particularly bad trick of timing, trade disruptions come even as the firm moved to exit a long-term (and low-margin) shipping arrangement with e-commerce king Amazon over the last several months. Shares have slumped roughly 30% over the last 12 months as a result, but it’s hard to imagine UPS staying down for long due to its dominant position in shipping and logistics.
From a dividend perspective, UPS just provided shareholders its 16th year of consecutive dividend increases with a bump this January, and its $1.64-per-share payout is now more than double the 67-cent payout at the end of 2014. There’s definitely risk with UPS, as with other dividend stocks on this list, but there’s also reason to think it has a chance to successfully weather recent difficulties.
Verizon Communications Inc. (VZ)
Forward dividend yield: 6.6%
Telecom leader Verizon remains one of the most generous dividend-paying stocks in the S&P 500 and is the largest U.S. wireless carrier by market share, with about 40% of customers in the nation. Like many capital-intensive businesses across the telecom and infrastructure sector, the firm relies on big borrowing and big investment to stay on top.
But given the prospect of downward moves in interest rates, along with moves to reduce its debt from about $150 billion in 2023 to about $120 billion presently, Verizon is now even more secure in its position. What’s more, with projected annual earnings of about $4.69 per share, there is plenty of headroom above its $2.71 in annual dividends to ensure investors keep cashing those dividend checks for years to come.
Healthpeak Properties Inc. (DOC)
Forward dividend yield: 6.6%
DOC operates one of the largest networks of health care real estate in the nation after a massive merger with Physicians Realty Trust that closed at the beginning of 2024 and now spans 700 properties with about 49 million square feet of space. It is structured as a real estate investment trust, or REIT, meaning it gets preferential tax treatment as a corporation in exchange for a mandate to pass through at least 90% of taxable income to its shareholders via regular dividends.
But it’s worth noting that based on recent financial filings, its dividend coverage is maxed out — meaning it’s unlikely future payouts will be larger without a significant improvement to the business, and it’s not impossible for DOC to cut payouts in the future if things go south.
Alexandria Real Estate Equities Inc. (ARE)
Forward dividend yield: 6.7%
Health care specialist Alexandria Real Estate provides lab space and other science-related properties in key hubs like Boston, San Francisco, Seattle, New York and other high-growth areas for the health care industry. ARE boasts roughly 40 million square feet of rentable space and is a leader in its niche market — but unfortunately, building cost inflation continues to take a toll on long-term expansion plans. As the most obvious proof of that, the company said in its first-quarter earnings report that it has $1.3 billion in costs for current projects not yet under contract — and with a number that large, just a small increase in materials costs can add up in a hurry.
Shares are down about 38% over the last 12 months, which has boosted the company’s yield. For what it’s worth, the company’s projected funds from operations — a key metric for payout sustainability — remain well above what it’s distributing to shareholders. But given recent declines and continued tariff uncertainty, there is clearly still risk in this dividend stock.
[Read: 15 Best Dividend Stocks to Buy Now]
Pfizer Inc. (PFE)
Forward dividend yield: 7%
A Wall Street darling and top performer during the pandemic, Pfizer has struggled in the last year or so after stumbles with both its vaccine business as well as its attempt to compete in the increasingly lucrative obesity drug market. Shares have been roughly cut in half from their late 2022 peak as a result, including a decline of about 18% in the last 12 months. This Big Pharma mainstay may have fallen on hard times lately, but it also remains comfortably profitable with dividends of only about 60% of forecasted profits.
Like many stocks on this list, PFE has given reason for investors to be wary. But unlike some of its peers, this leading S&P 500 dividend stock has the benefit of consistent profitability and a strong footprint in a recession-resistant sector.
Altria Group Inc. (MO)
Forward dividend yield: 7%
Tobacco giant Altria is the bluest of the blue-chip stocks and a fixture of any listing of the best dividend stocks in the S&P 500. MO has a tremendous history of stability across even the stormiest stock market environments, including a track record of 56 years of consecutive dividend growth. There admittedly isn’t a ton of growth in cigarettes, but new brands like the NJOY vaping line will supplement the durable cigarette biz that drives tremendous dividends for shareholders.
Considering the landmark lawsuits against the tobacco industry are now coming up on 20 years old, there is plenty of proof that Altria knows how to make the most out of its business regardless of health risks. And with shares up about 18% in the last year to outperform the broader S&P 500, this is a dividend stock that also seems to have share momentum right now.
Conagra Brands Inc. (CAG)
Forward dividend yield: 7.3%
Conagra is a leader in processed and packaged foods, from Vlasic pickles to Marie Callender’s frozen meals to Orville Redenbacher popcorn. Founded in 1919, it stands behind some of the most iconic brands in the grocery store, but, unfortunately, those brands remain icons with older customers and are failing to connect. That’s a problem for all its peers as American consumers generally move away from processed foods, but doesn’t make the pain any less pronounced for CAG.
What’s more, inflationary pressures eating into margins have exacerbated the challenges. Shares are down about 30% year to date in 2025, which has certainly boosted the yield but signals the challenges ahead. A bit of good news for dividend investors, however, is that payouts of $1.40 annually remain only about two-thirds of total earnings, so the risk of a dividend cut isn’t quite as acute as other troubled stocks on this list.
LyondellBasell Industries NV (LYB)
Forward dividend yield: 8.7%
LyondellBasell is a petrochemicals company that is one of the world’s largest producers of plastics and resins, generating more than $40 billion in revenue across 2024. Unfortunately, profits have been harder to come by. That’s evidenced by the fact that the stock’s annualized dividend of $5.48 is well ahead of this year’s forecast for about $3.59 in earnings per share.
That said, analysts project fiscal 2026 earnings that will cover that payout — which, by the way, was boosted 3 cents per quarter this year. This chemicals leader is anything but a sure thing, however, with double-digit declines since Jan. 1 and continued economic and trade challenges globally. So as with many of the highest dividend-paying stocks in the S&P 500, it’s buyer beware in LYB.
Dow Inc. (DOW)
Forward dividend yield: 9.9%
Technically, materials giant Dow has the largest annualized yield of any S&P 500 component. But that’s after a decline of about 48% in the past 12 months. Recent global trade fears are part of the trouble, but Dow has struggled with profitability and a corporate restructuring to move it from a low-margin commodity company into a more innovative and growth-oriented materials firm.
Those struggles with the bottom line are most evident in the fact that Dow currently pays $2.80 annually in dividends per share but analysts project a mere 45 cents in profits per share this fiscal year — and $1.19 per share next year. That is a disturbing sign, and doesn’t bode well for its future payouts. For what it’s worth, the company re-affirmed its payout with its latest dividend in June. Only time will tell whether this leading S&P 500 dividend stock can keep its payouts steady as it tries to right the ship.
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10 Highest Dividend-Paying Stocks in the S&P 500 originally appeared on usnews.com
Update 07/17/25: This story was published at an earlier date and has been updated with new information.
