As we close out 2025, most investors are likely sitting on nice returns. The broader stock market shrugged off economic and policy uncertainty all year and the S&P 500 is up 17.3% on the year as a result. Certain stocks in the tech sector, such as AI darling Nvidia Corp. (ticker: NVDA), have done even better, as have alternative investments such as gold bullion.
[Sign up for stock news with our Invested newsletter.]
In such a “risk-on” market, however, dividend stocks have been out of favor. These sleepy companies tend to lack the earnings or revenue growth of the stocks that have done well in 2025. And while a big yield is nice for those looking for income, it is nevertheless hard to stomach a 20% or 30% decline in shares even when you’re getting a nice quarterly payday via dividends.
The following stocks are the highest dividend-paying stocks in the S&P 500, and all have yields of more than 6%. They all also face challenges as we enter 2026, with underperforming share prices that reflect the realities of their businesses. Investors should keep these headwinds in mind before chasing yield alone, in these or in any other high-yielding stock:
| Stock | Dividend yield |
| United Parcel Service Inc. (UPS) | 6.6% |
| Kraft Heinz Co. (KHC) | 6.6% |
| Verizon Communications Inc. (VZ) | 6.8% |
| Pfizer Inc. (PFE) | 6.9% |
| Altria Group Inc. (MO) | 7.3% |
| Healthpeak Properties Inc. (DOC) | 7.5% |
| Conagra Brands Inc. (CAG) | 8.0% |
| Alexandria Real Estate Equities Inc. (ARE) | 9.5% |
| LyondellBasell Industries N.V. (LYB) | 12.6% |
United Parcel Service Inc. (UPS)
Dividend yield: 6.6%
UPS had a tough 2025, with shares slumping about 20% since Jan. 1 thanks to slower global trade and economic uncertainty. What’s more, the company announced in April that it would cut 20,000 jobs and scale back operations as it ended a long-term partnership with Amazon.com on package delivery. In spite of all this, however, UPS raised its dividend for the 15th-straight year with a penny-per-share increase back in the first quarter — and if the logistics company follows the same model, it could boost payouts again in the next few months. But the big question for investors is whether UPS has weathered the worst of its recent disruptions and can deliver better performance in the new year.
Kraft Heinz Co. (KHC)
Dividend yield: 6.6%
Kraft Heinz has a troubled history, mashing together two consumer giants about 10 years ago but saddling the firm with big debt and little incentive to improve its admittedly old-school product line. In response, the company is planning to split up again into two separate, publicly traded companies by the second half of 2026. In the meantime, though, shares have drifted about 20% lower in 2025 thanks to struggles on both the top and bottom line. For what it’s worth, the company’s $1.60 in annual dividends is more than covered by current earnings — but what those payouts will be and how profits will look post-split are still open questions.
Verizon Communications Inc. (VZ)
Dividend yield: 6.8%
Verizon boasts about 150 million customers, making it the largest wireless provider in the nation. As a result, the telecommunications leader is consistently one of the most generous dividend-paying stocks out there. Of course, it’s expensive to build out and maintain that telecom network, so VZ carries more than $140 billion in total debt. The company can still cover its dividend, which is currently about 60% of total earnings, but growth is challenging to come by in a saturated wireless market. Shares are slightly better than flat on the year as a result, which is better than many other stocks on this list but hardly holds up to a 17% return for the S&P 500 in 2025.
Pfizer Inc. (PFE)
Dividend yield: 6.9%
Drugmaker Pfizer has been around since 1849 and has a long history of health care innovation. However, the company has struggled lately as vaccine sales have weakened and its drug pipeline has missed some big opportunities, including obesity and weight-loss treatments. Shares haven’t fared as poorly as some of the other dividend stocks on this list, rebounding significantly from their April lows to finish the year down only about 6% or so. However, that’s hardly an encouraging sign in a bull market like the one we’ve seen in 2025. The company has marked 16 consecutive years of dividend increases and continues to provide a yield that is nearly six times that of the broader S&P 500.
[Read: 7 Best Data Center Stocks, ETFs and REITs to Buy]
Altria Group Inc. (MO)
Dividend yield: 7.3%
With shares up about 10% this year, Altria has performed better than the other highest-yielding S&P 500 dividend stocks. Still, when compared with a gain of about 17% for the S&P index as a whole, it remains a significant laggard versus the broader market. Altria’s tobacco products, including Marlboro cigarettes, have generated decades of reliable cash flow, and the company is adept at protecting shareholder value. As proof, the company just raised its dividend again in October, marking more than 56 consecutive years of increases. But sales headwinds and long-term threats to tobacco make this a stock with plenty of challenges to offset its generous dividend yield.
Healthpeak Properties Inc. (DOC)
Dividend yield: 7.5%
A major player in medical office buildings and senior living properties, DOC oversees nearly 700 properties and 49 million square feet of health care real estate. But with continued threats to Medicaid amid belt-tightening under the Trump administration, uncertainty in health care has weighed on Healthpeak. What’s more, $9 billion in debt limits the company’s financial flexibility. DOC has the scale to stick around, but recent share momentum suggests that investors aren’t exactly optimistic about near-term trends.
Conagra Brands Inc. (CAG)
Dividend yield: 8%
Conagra is the brand behind grocery store staples like Bird’s Eye vegetables, Orville Redenbacher popcorn and Swiss Miss cocoa. The company has a rich history but is undoubtedly struggling lately with the challenges of higher costs and changing consumer tastes. Revenue has been flat for years, and shares have plunged more than 35% in 2025 as inflation has eaten away at earnings. Restructuring and debt reduction might help contain costs in 2026, but the fundamentals aren’t particularly encouraging. On the plus side, the $1.40 dividend is covered even by less-favorable profits. The bad news, of course, is that the status quo for the business isn’t particularly inspiring.
Alexandria Real Estate Equities Inc. (ARE)
Dividend yield: 9.5%
Alexandria is a leading real estate provider for life science and research facilities from Boston to San Francisco, controlling about 40 million square feet of specialized real estate. But 2025 has been rocky, as shares have slumped roughly 50% since Jan. 1 thanks to elevated construction costs on new facilities as well as broader earnings challenges. However, it’s undeniable that the high dividend remains tempting for many investors, and the long-term potential of this niche health care property firm is attractive. Still, with declining revenue and profitability struggles, there’s good reason ARE stock has been suppressed lately.
LyondellBasell Industries N.V. (LYB)
Dividend yield: 12.6%
Global chemicals leader LyondellBasell finishes 2025 with the highest yield in the entire S&P 500, thanks to a $1.37 quarterly dividend. However, the stock is down about 40% on the year due to pressure from trade disruptions and higher input costs that have slashed profits roughly in half from the previous fiscal year. Profits are expected to improve in fiscal 2026 but still remain weak. Worse yet, current earnings projections don’t fully cover the dividend for next year. The generous payout remains intact as of LYB’s latest declaration in December, but, as is often the case for stocks with extremely high yields, the future of the payout remains very uncertain for this top S&P dividend stock — so tread carefully.
[READ: 9 Best Growth Stocks for the Next 10 Years]
More from U.S. News
10 Best Growth Stocks to Buy for 2026
7 Best Long-Term ETFs to Buy and Hold
9 of the Best Bond ETFs to Buy for 2026
9 Highest Dividend-Paying Stocks in the S&P 500 originally appeared on usnews.com
Update 12/31/25: This story was previously published at an earlier date and has been updated with new information.
