When the stock market is volatile and unpredictable, one of the few things investors can rely on is a quarterly dividend from a high-quality stock.
The S&P 500 average dividend yield is currently 1.4%, but there are a handful of quality S&P 500 stocks with dividend yields above 4%. Unfortunately, a dividend yield is only as good as the company paying it, and an extremely high dividend yield can often be a red flag that a stock has underperformed significantly.
Here are six S&P 500 dividend stocks with at least 4% yields that investors can buy and sleep easy at night, according to Bank of America.
AT&T Inc. (NYSE:T)
AT&T is a diversified media & entertainment, telecommunications, and technology services provider.
Analyst David Barden is bullish on AT&T after the company recently completed the spin-off of its Warner Media assets to Discovery Inc (NASDAQ:WBD). AT&T has an adjusted 4.7% dividend yield following the spin-off. Barden says the new AT&T has an attractive yield, PE ratio and FCF multiple. In addition, he says its new structure has simplified its business, and it is relatively underweight among institutional investors.
Bank of America has a Buy rating and $25 price target for T stock.
IBM (NYSE:IBM)
IBM has struggled to adjust its legacy tech business in recent decades, but analyst Wamsi Mohan says IBM may finally be turning the corner in the coming years. Mohan says IBM now has several growth drivers in place, including its consulting business, its Red Hat subsidiary and automation software business, its improved margins following the divestiture of its healthcare business and its mainframe business following the launch of its System z product. IBM also has a 5.1% dividend, the highest yield on this list.
Bank of America has a Buy rating and $162 price target for IBM stock.
Simon Property Group Inc (NYSE:SPG)
Simon Property is a retail real estate investment trust (REIT) that specializes in regional malls and premium outlets.
The retail real estate industry was crushed in 2020 by pandemic lockdowns, but it is finally well-positioned in 2022 for a full reopening of the economy. Analyst Jeffrey Spector says Simon is a high-quality value REIT, and its underlying business is showing real signs of a rebound this year, including higher tenant sales and higher occupancy levels. Simon pays a 5% dividend.
Bank of America has a Buy rating and $175 price target for SPG stock.
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Philip Morris International Inc. (NYSE:PM)
Tobacco giant Philip Morris isn't necessarily the type of high-flying growth stock that provides excitement for traders, but the stock's 4.9% dividend yield has helped it buck the negative market trend so far in 2022 and generate a year-to-date total return of 7.8%. Analyst Lisa Lewandowski says Philip Morris shares are still undervalued, even after she reduced her earnings estimates for the next three years in March due to the company's exposure to Ukraine and Russia.
Bank of America has a Buy rating and $107 price target for PM stock.
Williams Companies Inc (NYSE:WMB)
Williams is a pure-play U.S. natural gas infrastructure company.
Analyst Chase Mulvehill says Williams is his favorite U.S. natural gas stock. Mulvehill says Williams's Haynesville wellhead-to-water optionality and its Transco backlog will continue to drive outperformance for investors. As gas prices have skyrocketed following the Russian invasion of Ukraine, Williams shares have generated a 37.3% year-to-date return, making it the top-performing stock on this list. Even after its big run, Williams shares still pay a 4.8% dividend.
Bank of America has a Buy rating and $38 price target for WMB stock.
Verizon Communications Inc. (NYSE:VZ)
Verizon is another one of the largest U.S. telecom companies.
Barden says elevated marketing surrounding Verizon's C-band deployment could weigh on margins in the near-term, but Verizon's Business segment volumes remain strong. In addition, he says Verizon has a defensible wireless subscriber base and a strong balance sheet following recent asset divestitures. He projects Verizon will also generate superior earnings growth to peers in coming years. Verizon shares also have a 4.7% dividend yield.
Bank of America has a Buy rating and $64 price target for VZ stock.
