Rising market uncertainty due to geopolitical volatility has some investors seeking refuge in high-yielding dividend stocks. Whether the market is up, down or sideways, a dividend payment from a solid company is always reliable. A strong economy and corporate tax cuts have many American companies swimming in cash, and many are choosing to return that cash to investors in the form of dividends and buybacks.
The average dividend yield for S&P 500 companies is at 1.88%, but there are plenty of companies that pay much higher yields than that. With Treasury yields near all-time lows and a growing number of corporate bond yields dropping below 0% around the world, investors can find reliable income in dividends instead.
The only red flag for investors to watch out for when it comes to high yielding dividend stocks are stocks that have endured steep declines, driving up their dividend yields relative to their share prices. But even many underperforming stocks can continue to pay their dividends as long as their business is healthy enough.
15 Biggest Yields
Here are the 15 S&P 500 stocks with the highest dividend yields, according to Finviz:
- Macy's Inc (NYSE: M), 9.9% yield.
- Macerich Co (NYSE: MAC), 9.4% yield.
- Altria Group Inc (NYSE: MO), 8.2% yield.
- Centurylink Inc (NYSE: CTL), 7.8% yield.
- Iron Mountain Inc (NYSE: IRM), 7.8% yield.
- Invesco Ltd. (NYSE: IVZ), 7.4% yield.
- Helmerich & Payne, Inc. (NYSE: HP), 6.9% yield.
- Occidental Petroleum Corporation (NYSE: OXY), 6.9% yield.
- Ford Motor Company (NYSE: F), 6.5% yield.
- Philip Morris International Inc. (NYSE: PM), 6.5% yield.
- L Brands Inc (NYSE: LB), 6.5% yield.
- Nielsen Holdings PLC (NYSE: NLSN), 6.3% yield.
- Williams Companies Inc (NYSE: WMB), 6.2% yield.
- Dow Inc (NYSE: DOW), 6.0% yield.
- AbbVie Inc (NYSE: ABBV), 5.8% yield.
It’s difficult to know when a company is at risk of cutting its dividend. However, one way to tell how much financial strain a dividend is placing on a company is to look at its payout ratio. Payout ratios of 100% or higher are relatively high risk for a dividend cut, while companies with ratios under 50% are easily covering their dividend payments with their earnings.
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