It's been a rough year for most S&P 500 investors chasing dividends. But there are pockets of dividend paying stocks that are working in a big way.
Just 15 stocks in the S&P 500, including financials like CME Group and Blackstone plus data storage and protection services firm Iron Mountain, are beating the S&P 500 on top of yielding anywhere from 2.5% to 4.1%, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. All these stocks are up 20% or more to top the year-to-date gain of the S&P 500.
Such stocks are the exception, not the rule. Most dividend stocks are doing abysmally this year. "Dividend-focused strategies ... still lag by a considerable margin; 2023 was not a year to play it safe," said Nicholas Colas of DataTrek Research.
2023: A No Go Year For S&P 500 Dividend Stocks
Investors clinging to dividend-paying stocks this year are having a tough time. And that's why finding the dividend stocks that actually are paying off is that much more important.
More than 45% of the 399 stocks in the S&P 500 that pay a dividend are down on the year. Meanwhile, more than three-quarters of S&P 500 dividend-paying stocks are lagging the S&P 500 on share prices. Not a great backdrop for dividend investing.
And it's not just a few unlucky dividend plays. Shares of the SPDR S&P Dividend ETF are down 3.1% this year. The S&P 500, at the same time is up, 20%. But a few high yielders do better still?
Standout Dividends
Trading firm CME Group is the standout when it comes to dividend payers with perks. Shares of the well-run trading firm already yield 4.1%. But on top of plump dividends, shares of the stock are up nearly 31% this year.
And you don't have to worry about the company's profit falling apart. Analysts think CME Group will make $9.17 a share this year, up 15% from the same year-ago period. And in 2024, profit is seen rising another nearly 3%.
Meanwhile, also in financials, investment firm Blackstone's shares are up an impressive 54% this year. In addition, the stock yields 3.9%. Analysts in this case, though, see Blackstone taking a gap year. The company's profit is expected to fall nearly 24% in 2023. But then in 2024, analysts are calling for a more than 38% jump in profit.
So, it was a tough year on S&P 500 dividend investors. But if you looked, you could find big dividends and stock gains — at the same time.
Top S&P 500 Yielders Beating The Market
All yield 2.5% or more and up 20% or more this year
| Company | Ticker | Year-to-date % ch. | Div. yield | Sector |
|---|---|---|---|---|
| CME Group | 30.6% | 4.1% | Financials | |
| Iron Mountain | 31.4 | 4.0 | Real Estate | |
| Blackstone | 54.0 | 3.9 | Financials | |
| TransDigm Group | 54.1 | 3.6 | Industrials | |
| Seagate Technology | 50.5 | 3.5 | Information Technology | |
| Digital Realty Trust | 38.2 | 3.5 | Real Estate | |
| Stanley Black & Decker | 24.8 | 3.5 | Industrials | |
| NRG Energy | 52.0 | 3.4 | Utilities | |
| Phillips 66 | 24.6 | 3.2 | Energy | |
| PACCAR | 41.2 | 3.2 | Industrials | |
| Packaging Corporation of America | 32.7 | 2.9 | Materials | |
| Comcast | 20.7 | 2.7 | Communication Services | |
| Welltower | 36.5 | 2.7 | Real Estate | |
| Snap-on | 22.5 | 2.7 | Industrials | |
| Molson Coors Beverage | 20.2 | 2.6 | Consumer Staples |
