Over 80% of the stocks in the S&P 500 pay a dividend, though most yield only around 2%. But screening for the highest-paying dividend stocks in the S&P 500 reveals some impressive yields. In fact, several of these High Dividend Stocks in the S&P 500 currently yield over 7%. And the top 10 highest-paying dividend stocks all yield 11% or more.
Higher yields come with higher risks though. Many of these stocks’ yields are so high because they’re struggling, and they may even have to slash their dividends soon. Read on to see which yields are still safe, and which you should stay away from.
From highest yield (25%) to lowest yield (11%), here are the 10 highest-paying dividend stocks in the S&P 500 today:
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The 10 Highest-Paying Dividend Stocks in the S&P 500
- Macy’s (M)
- Occidental Petroleum (OXY)
- Apache (APA)
- Kohl’s (KSS)
- ONEOK (OKE)
- Helmerich & Payne (HP)
- Simon Property Group (SPG)
- Schlumberger (SLB)
- Invesco (IVZ)
- Carnival Corp. (CCL)
Here’s a closer look at each one of the top 10 highest-paying dividend stocks.
1. Macy’s (M)
Dividend Yield 25.4%
Macy’s consistently tops the list of the highest-paying dividend stocks in the S&P 500, but that doesn’t make it a good investment. The stock is in the struggling retail sector and has lost almost 90% of its value over the last four years, as consumers steer away from bricks-and-mortar retail stores and revenues decline. Macy’s had been a steady dividend payer, but the company recently suspended its quarterly dividend and drew down $1.5 billion under its credit facility to provide financial flexibility amid the economic impacts of COVID-19. I would avoid for now.
2. Occidental Petroleum (OXY)
Dividend Yield 24.6%
Occidental Petroleum is among a growing list of energy sector companies that have lately led the high-dividend yield list. Occidental Petroleum is one of the largest integrated oil and gas companies in the U.S., boasting approximately 2.7 billion barrels of oil equivalent; the company also owns a chemicals business. Its 2019 purchase of Anadarko has given the company access to approximately 240,000 acres in additional oil land holdings in the profitable Permian Basin, establishing OXY as the region’s top operator. In spite of the lowest oil prices in 18 years, OXY is one of the few oil and gas companies expected to see an annual revenue increase in 2020 (though just barely). Of course, the primary attraction here is the high yield, but the company isn’t in bad shape today.
3. Apache (APA)
Dividend Yield 16.9%
Apache is another oil and gas exploration and production company that leads the S&P’s dividend yield list, thanks partly to a steep share price plunge during Q1 2020. After peaking at just over $16 billion in 2011, Apache’s annual revenues have been in decline ever since and are expected to fall to $4 billion in 2020 – a 37% decline compared to the previous year. Analysts expect APA’s revenue and earnings decline to bottom out this year, however, and turn up in 2021-2022. Nonetheless, the company recently slashed its quarterly dividend by 90% and is clearly in a weakened financial condition due to extremely low oil and natural gas prices. Given the extent to which APA shares have tumbled recently (the stock is just over $5 as of late March), speculators with strong stomachs could consider picking up a few shares as a long shot play. Just keep in mind that the stock’s longer-term trend is firmly down.
4. Kohl’s (KSS)
Dividend Yield 15.7%
Kohl’s is the largest retail department store chain in the U.S. with over 1,100 locations. Despite beating revenue and earnings expectations in its latest quarter, the company’s fortunes have been in decline in recent years, thanks largely to shifts in consumer shopping patterns, and its operating metrics have deteriorated. Not everyone sees dark skies ahead for KSS, however, as quite a few institutional investors and hedge funds have lately increased their equity holdings of the company. And unlike some of the companies on this list, Kohl’s recently increased its quarterly cash dividend by 5%. With fiscal and central bank stimulus being ramped up in the wake of the recent financial panic, KSS shares could be considered a bargain by value-oriented investors, but I’d wait for signs of recovery before buying here.
5. ONEOK (OKE)
Dividend Yield 15.3%
ONEOK is a leading U.S. natural gas midstream company with operations in Kansas, North Dakota and Texas. Like most energy companies, OKE faces serious challenges to its business in the wake of plunging crude oil and natural gas prices. But OKE has been in this situation before, notably in the 2015-16 energy sector crisis, and the company has a history of weathering even the toughest economic climates. Its dividend payouts have been trending impressively higher for the last several years, although this trend could see a temporary halt in 2020. Nonetheless, OKE’s steady dividend and attractive yield make it a tempting target for high-risk investors once the smoke finally clears from the coronavirus-led bear market.
6. Helmerich & Payne (HP)
Dividend Yield 15%
Helmerich & Payne is another energy stock with a high dividend yield in the wake of the recent sector-wide crash. The company designs and operates high-performance drilling rigs for conventional and unconventional oil/gas plays around the world. For 2020, analysts expect the firm’s revenues to decline 18% year over year, and a further 9% in 2021. Moreover, most analysts don’t envision the firm will be able to meaningfully increase its earnings anytime in the foreseeable future, especially in light of the low oil price environment. HP shares have lost 80% over the last year through March 2020, and while its dividend has held fairly steady in recent years and the company has maintained its planned June 2020 dividend despite the widespread financial market distress. HP definitely has its work cut out for it in terms of increasing its revenues and turning its share price around, but any improvement in energy prices from here could give HP’s stock price a boost.
7. Simon Property Group (SPG)
Dividend Yield 13.4%
America’s largest retail REIT and shopping mall operator recently announced that it would be temporarily closing its U.S. retail properties to help fight the spreading coronavirus. Prior to the pandemic, SPG reported strong retail sales momentum for Q4 2019, with retail sales per square foot for its malls and premium outlets increasing 5% year over year. SPG will almost certainly face economic headwinds in 2020, and many analysts foresee a dividend cut ahead. But once the economic environment stabilizes, the firm is likely to return to its full dividend. SPG’s annual revenues were trending mostly higher prior to the global pandemic, and analysts still expect revenues and earnings to resume a growth path again after this year. But make no mistake, SPG shares were in a downward trend well before the coronavirus created shock waves across the retail real estate market. I’d avoid until the shares establish a strong base and reverse the bearish trend.
8. Schlumberger (SLB)
Dividend Yield 12.9%
Schlumberger provides oilfield services including petroleum drilling, production, processing and information management. Its dividend yield hit a 15-year high after plunging oil prices contributed to its share price collapsing 70% in the first three months of 2020. Analysts don’t envision revenues turning up again for the company until 2022, so there’s not a lot to be excited about in the near term. Moreover, SLB has announced it will cut spending by 30% this year in the wake of lower petroleum prices, while reducing the number of its active rigs in North America to the lowest number since 2016. The share price sell-off looks overdone in the near-term, however, and any improvement in oil prices from here could push SLB higher, temporarily. Significant improvement is needed in several metrics, including net income and cash from operations (which hasn’t yet recovered from its big drop during the last oil patch crisis in 2015-16).
9. Invesco (IVZ)
Dividend Yield 12.6%
Invesco is a global investment management firm with over $1 trillion in assets under management. IVZ’s share price peaked at just over 40 in early 2015, and the stock has been in a bear market ever since, falling to a 17-year low of 8 in March. The firm’s quarterly net income is also down 6% from its 2018 peak, so there’s definitely room for improvement on the earnings front. Revenue estimates, by contrast, are more sanguine as analysts see the company’s top-line increasing 10% in 2020, year over year. Moreover, the company has a 10-year history of consecutively rising dividend payments and has cash-on-hand worth $1.7 billion, which should be sufficient to see the firm through adverse conditions in the year ahead. These considerations have been enough to entice a growing number of contrarians to look closely at the beaten-down shares of IVZ, which could benefit from any improvement to the intermediate-term economic picture.
10. Carnival Corp. (CCL)
Dividend Yield 11.2%
Shares of cruise line Carnival hit a 27-year low recently as cruise bookings have collapsed in the wake of the COVID-19 crisis. While there was some initial hope that Carnival could receive bailout money from the $2 trillion financial stimulus bill passed by the U.S. Congress in March, early indications suggest that the cruise line industry may not be eligible for the money. This news didn’t stop value-oriented investors from buying shares of CCL, which doubled in the final days of Q1 2020. In fact, a bailout of the cruise lines may not even be necessary if the economy can recover at some point in the coming months. While the company’s net income for 2019 of $3 billion was essentially unchanged from 2018, its 2019 revenues were 10% higher from the prior year, so its financial condition before the global crisis was in fairly good shape. And while revenues for 2020 are forecast to be 16% lower year over year, analysts believe 2021 will witness a rebound for the company, with a predicted 20% annual revenue rebound. If you have a long-term investment timeframe and don’t mind above-normal volatility, CCL might be worth watching given its attractive dividend yield.
Going purely by the numbers, those are the highest-paying dividend stocks in the S&P 500. Not all of them are gems right now. Some of them are in shambles, and are using a high dividend yield as their only remaining life raft.
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Timothy Lutts heads one of America’s most respected independent investment advisory services. Each week, Tim personally picks the single best stock in his exclusive Cabot Stock of the Week advisory. Build your wealth and reduce your risk with the top stock each week for current market conditionsLearn More
*This post has been updated from an original version, published in 2018.