Dividend investors should know that blindly buying stocks with the highest dividend yields can be a dangerous game.
Indeed, an unusually high dividend yield is often a warning sign. That's because stock prices and dividend yields move in opposite directions. It's possible that a too-good-to-be-true dividend yield is simply an effect of a stock having lost a lot of value.
And anytime a company's stock is slumping badly, it's worth wondering if its dividend is sustainable at current levels.
Case in point: look at what happened with Newell Brands (NWL) last year.
Newell, whose portfolio of products ranges from Rubbermaid and Sharpie to Oster and Yankee Candle, was having a tough 2023. Shares lost a third of their value through mid-May, pushing up the yield on NWL's dividend to as much as 9.7%.
That seemed pretty obviously unsustainable, and indeed it was. In the spring, Newell cut its quarterly dividend by almost 70% to 7 cents per share. (The company said the cash formerly earmarked for shareholders will be used to pay down debt, which is probably a good idea.) Nonetheless, the yield on Newell's dividend tumbled to below 3% from knocking on the door of 10%.
Stocks with the highest dividend yields
So, yes, sometimes stocks with the highest dividend yields can be fool's gold. And this could be pertinent to some of the stocks with the highest dividend yields in the S&P 500 today. Be forewarned that in some cases the names below have entered elite-yield territory only because their share prices have come under stress. In turn, that has some analysts concerned about the sustainability of payouts going forward.
Happily for dividend investors, some Buy-rated blue chip stocks anchor the list. Verizon Communications (VZ), one of Wall Street's top Dow Jones stocks, has raised its dividend annually for two decades. Meanwhile, Pfizer (PFE) has a 15-year track record of consecutive hikes to its payout.
With those explanations and caveats out of the way, below please find the 15 S&P 500 stocks with the highest dividend yields.
Market data, analysts' estimates and analysts' recommendations are as of November 21, 2024, courtesy of YCharts and S&P Global Market Intelligence. Stocks are listed by forward dividend yield, from highest to lowest.
| Company (Ticker) | Forward Dividend Yield | Analysts' Consensus Recommendation |
|---|---|---|
| Walgreens Boots Alliance (WBA) | 12.14% | Hold |
| Altria Group (MO) | 7.07% | Hold |
| Pfizer (PFE) | 6.74% | Buy |
| LyondellBasell Industries (LYB) | 6.50% | Hold |
| Verizon Communications (VZ) | 6.42% | Buy |
| Dow (DOW) | 6.37% | Hold |
| Crown Castle (CCI) | 6.00% | Hold |
| Franklin Resources (BEN) | 5.73% | Sell |
| Healthpeak Properties (DOC) | 5.60% | Buy |
| Ford Motor (F) | 5.59% | Hold |
| Realty Income (O) | 5.56% | Buy |
| VICI Properties (VICI) | 5.39% | Buy |
| The AES Corp (AES) | 5.20% | Buy |
| Kraft Heinz (KHC) | 5.18% | Buy |
| Conagra Brands (CAG) | 5.16% | Hold |
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