Investors seeking attractive yields now have an alternative to the traditional allure of 10-year Treasuries, as 13 S&P 500 dividend stocks are currently outperforming the 4.1% yield offered by these government bonds. The recent plunge in Treasury yields to 4.1% has redirected attention towards S&P 500 stocks that offer significantly higher yields.
An analysis by Investor’s Business Daily, utilizing data from S&P Global Market Intelligence and MarketSmith, identifies 13 S&P 500 stocks, including Pioneer Natural Resources (PXD), Walgreens Boots Alliance (WBA), and Altria Group (MO), with yields of 6.2% or more. This marks a substantial 50% increase compared to the yield on the 10-year Treasury.
The shift in dynamics is drawing attention from investors, particularly as the market has transitioned from obsessively monitoring the trajectory of 10-year Treasury yields to considering the suddenly competitive S&P 500 dividends. Quincy Krosby, Chief Global Strategist for LPL Financial, notes that the unexpected drop in yields has positioned S&P 500 dividends as a serious challenger to Treasuries.
The decline in 10-year Treasury yields, currently 20% lower at 4.1% from just weeks ago, contributes to the newfound appeal of dividend-paying stocks. While value stocks face challenges, yields on many dividend stocks are rising rapidly. Currently, there are 79 S&P 500 stocks offering yields equal to or greater than 10-year Treasuries.
The average yield of the 400 S&P 500 stocks paying dividends is 2.64%, but the top performers significantly surpass this figure. Notably, Pioneer Natural stands out with an impressive 12.2% yield, making it the only S&P 500 stock offering a double-digit percentage dividend. Walgreens Boots Alliance follows closely with a 9.4% yield, a result of a substantial stock price decline.
However, it’s essential for investors to consider the trade-off. All 13 S&P 500 stocks yielding more than 6.2% have experienced declines this year. This is particularly noteworthy given the S&P 500’s 20% surge in 2023. The article provides a list of the highest-yielding S&P 500 stocks, highlighting their dividend yields, sectors, and the trade-offs associated with each.
Highest Yielding S&P 500 Stocks
Company Ticker Dividend yield Sector
Pioneer Natural Resources (PXD) 12.21% Energy
Walgreens Boots Alliance (WBA) 9.36 Consumer Staples
Altria Group (MO) 9.21 Consumer Staples
Invesco (IVZ) 8.27 Financials
Verizon (VZ) 6.92 Communication Services
Devon Energy (DVN) 6.5555 Energy
Healthpeak Properties (PEAK) 6.54 Real Estate
Whirlpool (WHR) 6.476 Consumer
Discretionary Kinder Morgan (KMI) 6.4571 Energy AT&T (T) 6.45 Communication Services KeyCorp (KEY) 6.34 Financials Boston Properties (BXP) 6.32 Real Estate Truist Financial (TFC) 6.27 Financials
In conclusion, while the current market presents challenges, investors looking for high dividend yields now have a variety of S&P 500 stocks to choose from, offering an alternative to traditional fixed-income investments.
