Stocks With the Highest Dividend Yields in the S&P 500Stocks With the Highest Dividend Yields in the S&P 500

Telecoms and regional banks dominate the list of stocks with the highest dividend yields in the benchmark index.

Experienced equity income investors know that blindly buying stocks with the highest dividend yields can be a dangerous game.

Indeed, an unusually high dividend yield can actually be a warning sign. That’s because stock prices and dividend yields move in opposite directions. It’s possible that a too-good-to-be-true dividend yield is simply a side effect of a stock having lost a lot of value. 

And anytime a company’s stock is slumping badly, it’s worth wondering if its dividend is sustainable at current levels.

Case in point: look at what happened with Newell Brands (NWL a few months back.

Newell, whose portfolio of products ranges from Rubbermaid and Sharpie to Oster and Yankee Candle, is having a tough 2023. Shares lost a third of their value through mid-May, pushing up the yield on NWL’s dividend to as much as 9.7%.

That seemed pretty obviously unsustainable, and indeed it was. On May 16, Newell cut its quarterly dividend by almost 70% to 7 cents per share. The company intends to use the cash formerly earmarked for shareholders to pay down debt, which is probably a good idea. Nonetheless, the yield on Newell’s dividend tumbled to below 3% from knocking on the door of 10%.

Stocks with the highest dividend yields

So, yes, sometimes stocks with the highest dividend yields can be fool’s gold. And this could be pertinent to a least a couple of the stocks with the highest dividend yields in the S&P 500 today. 

Two of the following five stocks with the highest dividend yields in the S&P 500 are regional banks. Be aware that their dividend yields are unusually elevated these days because their share prices are under duress. The regional bank crisis of last spring and a slew of recent credit ratings downgrades have some market participants questioning whether current dividend levels are sustainable. 

With those caveats out of the way, below please find the five S&P 500 stocks with the highest dividend yields.

Market data, analysts’ estimates and analysts’ recommendations are as of August 23, 2023, courtesy of YCharts and S&P Global Market Intelligence. Stocks are listed by dividend yields, from lowest to highest.

Truist Financial

  • Market value: $37.7 billion
  • Dividend yield: 7.42%
  • Analysts’ consensus recommendation: Buy 

Regional banks are having a bad year, and that has a couple of sector names cracking the list of stocks with the highest dividend yields in the S&P 500.

First up is Truist Financial (TFC . Shares in the nation’s seventh largest bank by assets tumbled in March when Silicon Valley Bank collapsed. TFC didn’t bottom out until May, at which point it had lost nearly 40% of its value in 2023. 

TFC went on to stage a remarkable rally, however. Shares gained more than 35% between early May and mid-July. Alas, it was not to last. Downgrades to the credit ratings of regional lenders unnerved the sector, and when Moody’s placed Truist on review for a possible ratings cut, shares coughed up most of what they had recovered. 

The result is a stock that’s off by more than a third so far in 2023, pushing the yield on TFC’s dividend up to 7.42%. With a five-year average dividend yield of 3.8%, TFC’s yield is high because shares are so very depressed. 

Happily for shareholders, Truist said it plans to maintain its current quarterly dividend, and that has some analysts calling TFC a bargain. 

Of the 25 analysts covering TFC tracked by S&P Global Market Intelligence, five say it’s a Strong Buy, five have it at Buy, 14 call it a Hold and one rates it at Strong Sell. That works out to a consensus recommendation of Buy, albeit with modest conviction. 


  • Market value: $101.9 billion
  • Dividend yield: 7.78%
  • Analysts’ consensus recommendation: Buy 

AT&T (T is the first of two telecommunications companies on our list of stocks with the highest dividend yields in the S&P 500 . No surprise there. Thanks to customers sending in their checks every month, telcos are known for their generous and dependable dividends. 

In AT&T’s case, the company has paid uninterrupted dividends since 1984. Until 2019, it had raised its payout annually for more than three decades, making it a one-time member of the S&P 500 Dividend Aristocrats

Shares are off by more than a fifth for the year-to-date, which has pushed up the dividend yield to levels last seen in October 2022. That might seem ominous, but at 7.78%, AT&T’s dividend yield is actually below its five-year average of 8.3%.

Shareholders can also take comfort in the fact that AT&T has been chipping away at its heavy debt load and freeing up cash. The company generated positive free cash flow (from which dividends are funded) of $103.4 billion in 2022. That compares favorably against negative free cash flow of $67.7 billion the previous year. 

Of the 29 analysts covering AT&T tracked by S&P Global Market Intelligence, 10 call it a Strong Buy, two have it at Buy, 15 say it’s a Hold and two rate it at Strong Sell. That works out to a consensus recommendation of Buy with tepid conviction. 


  • Market value: $9.9 billion
  • Dividend yield: 7.85%
  • Analysts’ consensus recommendation: Buy 

KeyCorp (KEY is another regional bank whose stock was already under pressure along with the rest of the sector – and then things got worse. Both Moody’s and S&P Global Ratings downgraded the lender’s credit rating, citing issues such as constrained profitability and a “tough” lending environment.

Shares in KeyCorp are now off about 40% for the year-to-date, pushing up the yield on the dividend to well above its five-year average of 5.6%.

The elevated yield on KeyCorp’s dividend naturally has investors worried about a potential cut. Somewhat unhelpfully, experts are split on whether the payout is safe. 

JPMorgan Chase, for example, upgraded KEY to Neutral (the equivalent of Hold) from Underweight (Sell) in early August, noting that the bank has “enough runway to manage its capital to required levels with less much risk of a dividend cut over the near-term.”

Other observers are less optimistic. Speaking for the bears, CFRA Research analyst Alexander Yokum downgraded KEY to Strong Sell from Sell in mid-August.

“We believe KEY’s dividend is at risk of getting cut,” Yokum wrote in a note to clients. “KEY’s dividend payout ratio hit 76% in 2Q 2023 vs peers’ 42%. KEY’s payout ratio has ballooned from just 36% in 3Q 2022 and we don’t see any relief in sight given rising funding costs.”

CRFA Research’s concerns notwithstanding, Wall Street tips toward bullishness on the name. Of the 22 analysts covering KEY tracked by S&P Global Market Intelligence, 10 call it a Strong Buy, two say Buy, nine have it at Hold and one rates it at Strong Sell. That works out to a consensus recommendation of Buy, with moderate conviction. 


  • Market value: $140.7 billion
  • Dividend yield: 7.86%
  • Analysts’ consensus recommendation: Hold 

Telecommunications stocks such as Verizon Communications (VZ are known for producing steady and generous dividends. As the only telecom in the Dow Jones Industrial Average , Verizon gets more than its fair share of attention from institutional investors looking for equity income. 

True, VZ sports one of the highest dividend yields in the benchmark index partly because shares are off by about 23% over the past 52 weeks. That said, at 7.86%, VZ’s dividend yield is not wildly out of line with past levels. The stock’s three-year average dividend yield stands at 6.5%.

Long-term investors seeking out the best dividend growth stocks will be happy to know that this telco is also a reliable dividend grower. VZ has hiked its payout annually for 18 consecutive years. And the dividend increases should keep coming. 

How can we know this? Verizon generated free cash flow (or the cash remaining after expenses, capital expenditures and financial commitments are met) of $11.5 billion for the 12 months ended June 30, 2023. And that was after disbursing $10.9 billion in dividends.

As for VZ stock’s prospects for beating the market over the next 12 to 18 months, Wall Street is split. Analysts’ consensus recommendation stands at Hold, per S&P Global Market Intelligence. 

Altria Group

  • Market value: $76.9 billion
  • Dividend yield: 8.79%
  • Analysts’ consensus recommendation: Hold 

Altria Group (MO always sports a generous dividend yield, but it rarely claims the top spot on the list of stocks with the highest dividend yields in the S&P 500. 

The deal with Altria is that there isn’t much growth to be found in the U.S. tobacco business. And so the company known for Marlboro cigarettes and Copenhagen dipping tobacco has to keep shareholders happy with generous and reliable dividends.

But dividends are only part of the story when it comes to Altria’s status as a defensive stock. Sales of its addictive products tend to hold up well when economic times get tough. MO stock also tends to trade with much lower volatility relative to the broader market.

Those characteristics – as well as a dividend yield of more than 8.7% and 13 consecutive years of dividend increases – make MO a pretty good place to hide in a bad market. 

That was certainly the case in 2022, when the S&P 500 generated a total return (price change plus dividends) of -18%. It was one of the worst years ever for stocks, and yet MO delivered a total return of +4.4%.

By the same token, defensive stocks like Altria tend to underperform in rising markets. And that’s certainly been the case in 2023. While the S&P 500’s total return came to almost 17% through August 23, MO’s total return stood at -1.6%.

Analysts expect Altria only to match the performance of the broader market over the next 12 to 18 months, assigning it a consensus recommendation of Hold, per S&P Global Market Intelligence. 

Photo by Alexander Mils on Unsplash

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