The Highest Yielding S&P 500 Stocks

If you are on the hunt for yield, the top 10 highest-yielding S&P 500 stocks are a tempting place to look for new ideas. Compared to the less than 1.6% 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 6.25%.

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

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

Pioneer Natural Resources (PXD) • 14.81%

Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States.

Lumen Technologies (LUMN) • 12.85%

Lumen Technologies Inc. (NYSE: LUMN) is guided by our belief that humanity is at its best when technology advances the way we live and work. With approximately 450,000 route fiber miles and serving customers in more than 60 countries, we deliver the fastest, most secure platform for applications and data to help businesses, government and communities deliver amazing experiences.

Coterra Energy Inc. (CTRA) • 9.50%

Coterra is a premier exploration and production company based in Houston, Texas with focused operations in the Permian Basin, Marcellus Shale and Anadarko Basin. We strive to be a leading producer, delivering returns with a commitment to sustainability leadership.

Devon Energy (DVN) • 9.49%

Devon Energy is a leading oil and gas producer in the U.S. with a premier multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devon’s disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations.

Diamondback Energy (FANG) • 9.42%

Diamondback is an independent oil and natural gas company headquartered in Midland, Texas
focused on the acquisition, development, exploration and exploitation of unconventional, onshore
oil and natural gas reserves in the Permian Basin in West Texas.

Vornado Realty Trust (VNO) • 9.15%

Vornado Realty Trust (NYSE: VNO) is a fully-integrated Real Estate Investment Trust (REIT). Vornado has a concentration of premier assets and a focused strategy of growing its dominant position in New York City office and Manhattan high street retail.

Altria (MO) • 6.83%

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).

Simon Property Group (SPG) • 7.69%

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.

Oneok (OKE) • 6.98%

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.

AT&T (T) • 6.98%

We help more than 100 million U.S. families, friends and neighbors connect in meaningful
ways every day. From the first phone call 140+ years ago to our 5G wireless and multi-gig
internet offerings today, we @ATT innovate to improve lives.