If you are on the hunt for yield, the top 10 highest yielding S&P 500 stocks is a tempting place to look for new ideas. Compared to the less than 2.5% yield offered by investing in an S&P 500 index fund, the average yield of the highest 10 dividend-paying S&P 500 stocks is over 8.3%.
The list below includes the 10 highest yielding S&P 500 stocks along with their indicated dividend yield. Click the company name for more information on each stock.
Highest Yielding S&P 500 Stocks
|Simon Property (SPG)||11.53%|
|Oneok Inc. (OKE)||9.22%|
|Iron Mountain (IRM)||8.71%|
|Williams Cos. (WMB)||7.74%|
|Wells Fargo & Co. (WFC)||7.08%|
|ExxonMobil Corp. (XOM)||7.07%|
|Prudent Financial (PRU)||6.91%|
There are some compelling indicated yields on the list, but indicated is the operative word. It is often the case that stocks with the highest indicated dividend yields are also the most likely to cut their dividends.
For example, 4 of the 10 highest yielding S&P 500 stocks at year-end 2016 have since decreased or eliminated their dividends. The average performance of that group of stocks over the following three years was -34%.
The Best Dividend Stocks
Selecting the best dividend stocks isn’t as simple as finding the highest yielding companies. The chart below compares the long-term performance of five different dividend investing strategies.
The first strategy represented by the column to the far right on the chart ranks all U.S. stocks by dividend yield and invests in the highest yielding 10% of stocks. All stocks are re-ranked and the portfolio is reformed annually. The second strategy, represented by the second column in from the right, buys companies in the second 10% or second decile as ranked by yield. The other three portfolios follow suit.
The Best Performing Dividend Investment Strategy
As the dividend strategy chart illustrates, investing in the highest yielding stocks doesn’t deliver the best returns. The best performing dividend investing strategy out of the five shown here is the portfolio that invests in dividend-paying stocks in the third decile ranked by yield.
The actionable investment advice is to look beyond stocks with the juiciest yields. Proper dividend investing should weigh a range of factors. Yield is certainly one consideration, but dividend safety and dividend growth are others that may be even more important.
Young Research’s Retirement Compounders® portfolio is a dividend-based strategy that takes into account dividend yield, dividend growth, dividend consistency, and dividend safety, among other factors. To learn more about a managed solution for the Retirement Compounders® visit younginvestments.com.
The 10 Highest Yielding S&P 500 Stocks
Simon is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (Simon Property Group, NYSE: SPG). Our properties across North America, Europe and Asia provide community gathering places for millions of people every day and generate billions in annual sales.
CenturyLink is an integrated communications company that provides communications services to residential and business customers. The communications company owns a vast fiber optics network that spans the globe.
ONEOK, Inc. (NYSE: OKE) is a leading midstream service provider and owner of one of the nation’s premier natural gas liquids (NGL) systems, connecting NGL supply in the Rocky Mountain, Mid-Continent and Permian regions with key market centers and an extensive network of natural gas gathering, processing, storage and transportation assets.
Iron Mountain Incorporated, founded in 1951, is the global leader for storage and information management services. Trusted by more than 225,000 organizations around the world, and with a real estate network of more than 90 million square feet across nearly 1,450 facilities in approximately 50 countries, Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts. Providing solutions that include secure records storage, information management, digital transformation,
secure destruction, as well as data centers, cloud services and art storage and logistics, Iron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster, and enable a more digital way of working.
Altria’s wholly-owned subsidiaries include Philip Morris USA Inc. (PM USA), U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co. (Middleton), Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman), Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and Philip Morris Capital Corporation (PMCC). Altria owns an 80% interest in Helix Innovations LLC (Helix). Altria holds equity investments in Anheuser-Busch InBev SA/NV (ABI), JUUL Labs, Inc. (JUUL) and Cronos Group Inc. (Cronos).
Ventas, Inc., is a leading real estate investment trust. Its diverse portfolio of approximately 1,200 assets in the United States, Canada and the United Kingdom consists of senior housing communities, medical office buildings, university-based research and innovation centers, inpatient rehabilitation and long-term acute care facilities, and health systems. Through its Lillibridge subsidiary, Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States.
The Williams Companies, Inc., is an energy company based in Tulsa, Oklahoma. Its core business is natural gas processing and transportation, with additional petroleum and electricity generation assets.
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.98 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products, and services, as well as consumer and commercial finance, through 7,400 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 31 countries and territories to support customers who conduct business in the global economy. With approximately 263,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2019 rankings of
America’s largest corporations.
ExxonMobil, one of the world’s largest publicly traded energy providers and chemical manufacturers, develops and applies next-generation technologies to help safely and responsibly meet the world’s growing needs for energy and high-quality chemical products.
Prudential Financial, Inc. (NYSE: PRU), a financial wellness leader and premier active global investment manager with more than $1 trillion in assets under management as of March 31, 2020, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees help to make lives better by creating financial opportunity for more people.