There's nothing like a plunge in yields to 4.1% to cool the mad dash to buy 10-year Treasuries. Now you can buy S&P 500 stocks that yield much more.
Today you'll find 13 S&P 500 stocks, including Pioneer Natural Resources, Walgreens Boots Alliance and Altria Group yielding 6.2% or more, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's at least 50% higher than the 4.1% you'd get with a current yield on the 10-year Treasury.
Seeing so many stocks yielding more than Treasuries is a wake-up call for investors. "A market that was obsessively focused on the path of the 10-year Treasury yield, and rightly so as it quickly breached 5% on Oct. 19, has also embraced the faster than expected drop lower for yields," said Quincy Krosby, Chief Global Strategist for LPL Financial.
S&P 500 Dividends Challenge Treasuries Again
Almost overnight, S&P 500 dividends offer real competition to Treasuries. And there's no shortage of big yields.
Part of the new math is due to plunging 10-year Treasury yields. At 4.1%, Treasury yields are nearly 20% lower than they were just weeks ago. Meanwhile, yields on many dividend paying stocks are soaring as value stocks struggle. That's pushing yields higher on select stocks — and fast. There are now 79 stocks in the S&P 500 that yield as much or more than 10-year Treasuries.
The average yield of the 400 S&P 500 stocks that pay a dividend is 2.64%. And you can find stocks yielding much more than that.
Top S&P 500 Yielders: Pioneer Natural
You'll find many S&P 500 stocks yielding more than 6% if you look for them.
If all you care about is a giant yield, Irving, Texas-based Pioneer Natural is the stock to beat. It's yielding an impressive 12.2% despite the stock falling just 2.6% this year. Just know that the dividend likely won't stick around forever. Rival Exxon Mobil is looking to buy Pioneer for roughly $65 billion. Exxon Mobil stock yields just 3.8% — a fraction of what Pioneer does.
Pioneer is the only S&P 500 stock paying a double-digit percentage as a dividend. But approaching that level at a 9.4% yield is ailing drugstore Walgreens Boots Alliance. Mostly due to a 43% plunge in the stock price, the company now yields 9.4%. That's certainly an outlier. S&P 500 industry peer CVS Health, in contrast, yields just 3.4%. And the company's growth prospects don't inspire confidence. Walgreens Boots' adjusted profit per share is seen falling more than 16% this fiscal year.
And that's unfortunately the trade-off. All 13 of the S&P 500 stocks yielding more than 6.2% are down this year. You have to look hard to find high dividends from S&P 500 stocks up this year. That stings all the more given that the S&P 500 rocketed roughly 20% in 2023 so far.
But if what you want is a high dividend yield, you've got plenty of stocks to choose from now.
Highest Yielding S&P 500 Stocks
| Company | Ticker | Dividend yield | Sector |
|---|---|---|---|
| Pioneer Natural Resources | 12.21% | Energy | |
| Walgreens Boots Alliance | 9.36 | Consumer Staples | |
| Altria Group | 9.21 | Consumer Staples | |
| Invesco | 8.27 | Financials | |
| Verizon | 6.92 | Communication Services | |
| Devon Energy | 6.5555 | Energy | |
| Healthpeak Properties | 6.54 | Real Estate | |
| Whirlpool | 6.476 | Consumer Discretionary | |
| Kinder Morgan | 6.4571 | Energy | |
| AT&T | 6.45 | Communication Services | |
| KeyCorp | 6.34 | Financials | |
| Boston Properties | 6.32 | Real Estate | |
| Truist Financial | 6.27 | Financials |
