Stocks with High Dividend Yield in the S&P 500

Dividend stocks provide their shareholders with regular income in the form of dividend payments, in addition to the potential for stock price appreciation. Shareholders can generate cash flow from their investments through dividend payments, without the requirement of selling any shares. However, the amount and frequency of dividend payments are determined at the discretion of the company's board of directors.

Dividends are therefore variable and not guaranteed. The board may decide to reduce or even eliminate dividends at any point, especially if the company's financial situation deteriorates. Shareholders invest in dividend-paying stocks with the understanding that dividend payments rely on ongoing profitability and can fluctuate depending on business conditions.

Here are multiple stocks with the high dividend yields in the S&P 500.

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High Dividend Stocks in the S&P 500

Note: Market data as of October 6, 2023

Source: Highest dividend stocks (www.bankrate.com)>>

1. Altria Group (MO)

Altria Group, Inc. is a holding company that manufactures and sells cigarettes and other tobacco products in the United States. The company operates through three segments: Smokeable Products, Oral Tobacco Products, and Wine. The Smokeable Products segment sells cigarettes under brands produced by subsidiary Philip Morris USA as well as machine-made cigars and pipe tobacco sold under the Middleton brand.

The Oral Tobacco Products segment sells moist smokeless tobacco under the Copenhagen and Skoal brands and nicotine pouches under the on! brand through subsidiary Helix. The Wine segment sells wine produced through subsidiary Ste. Michelle Wine Estates. Founded in 1919 and headquartered in Richmond, Virginia, Altria states that its focus is on returning capital to shareholders while transitioning adult smokers away from cigarettes over time.

Dividend yield: 9.5%

Annual dividend: $3.92

2. Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance, Inc. operates retail pharmacies and provides healthcare services. The company has three business segments: United States Retail Pharmacy, International, and United States Healthcare. The U.S. Retail Pharmacy segment consists of retail drugstores, health and wellness services, specialty and home delivery pharmacy services, and an equity investment.

In its 2022 fiscal year, Walgreens' U.S. pharmacy business administered approximately 35 million COVID-19 vaccinations. Walgreens has consistently paid dividends to shareholders since 1989.

Dividend yield: 9.5%

Annual dividend: $1.92

3. Verizon (VZ)

Verizon Communications Inc. operates as a holding company that provides communications, information, and entertainment products and services. The company has two main operating segments: Verizon Consumer Group and Verizon Business Group.

The Verizon Consumer Group segment offers wireless and wireline communications services and products aimed at consumer customers. Verizon Communications is headquartered in New York City and was founded in 1983. The company operates its consumer and business lines of business in the United States primarily.

Dividend yield: 8.3%

Annual dividend: $2.66

4. Keycorp (KEY)

KeyCorp operates as a bank holding company that provides a range of financial services to retail, commercial, and institutional clients. The company's offerings include retail and commercial banking, commercial leasing, investment management, consumer finance, student loan refinancing, commercial mortgage servicing, and investment banking products and services.

Founded in 1958 and headquartered in Cleveland, Ohio, KeyCorp provides its financial services through its network of bank branches primarily in the United States. The company operates its business lines through subsidiary KeyBank National Association.

Dividend yield: 8.1%

Annual dividend: $0.82

5. Truist Financial Corp. (TFC)

Truist Financial Corp. operates as a financial holding company that provides banking services to consumers, businesses, and local governments. The company has four main business segments: Consumer Banking and Wealth, Corporate and Commercial Banking, Insurance Holdings, and Treasury & Corporate.

Truist was established in 2019 as a result of the merger between BB&T and SunTrust banks. Headquartered in Charlotte, North Carolina, Truist had over 2,100 branch locations primarily across the Southeastern United States at the end of 2022. The company provides traditional banking products and services to retail, commercial, and institutional customers through its subsidiary bank Truist Bank.

Dividend yield: 7.7%

Annual dividend: $2.08

6. AT&T (T)

AT&T Inc. operates as a holding company that provides telecommunications, media and technology services globally. The company has two business segments: Communications and Latin America. The Communications segment offers services to consumers and businesses in the United States and U.S. territories. The Latin America segment provides entertainment and wireless services outside of the U.S.

AT&T was founded in 1983 and is headquartered in Dallas, Texas. In recent years, AT&T has divested some assets and reduced its dividend payout as part of a strategic shift to focus on 5G network investments and debt reduction. The company has carried significant debt loads in recent years.

Dividend yield: 7.5%

Annual dividend: $1.11

7. Simon Property Group (SPG)

Simon Property Group Inc. operates as a real estate investment trust that is focused on retail real estate assets. The company owns, develops, and manages shopping malls, Premium Outlets, and The Mills branded properties. Founded in 1993 by Fred Simon, Herbert Simon, and Melvin Simon, Simon Property Group is headquartered in Indianapolis, Indiana.

The company's portfolio consisted of interests in 196 retail income-producing properties at the end of 2022. Simon Property Group manages its real estate properties directly rather than utilizing external management. The company's properties are located across North America, Asia, and Europe.

Dividend yield: 7.3%

Annual dividend: $7.60

8. V.F. Corp. (VFC)

VF Corporation is an apparel, footwear and accessories company that operates through segments including Outdoor, Active, Work and Other. Its Outdoor segment consists of outdoor-focused lifestyle brands offering performance apparel, footwear and gear. Founded in 1899 and headquartered in Denver, Colorado, VF owns a portfolio of brands such as Vans, The North Face and Timberland.

In recent years, VF has faced challenges from declining revenues for some brands along with excess inventories leading to increased discounting. The company has consistently paid dividends to shareholders for over 10 years. VF sells its products globally through wholesale customers, company-operated stores and websites.

Dividend yield: 7.3%

Annual dividend: $1.20

FAQs for Dividend Stocks

1. What is a Dividend Yield

Dividend yield measures a stock's dividend income relative to its share price. It represents the percentage return a shareholder would receive in dividends over the past year based on the current stock value. While useful for evaluating income potential, dividend yield has limitations.

Stock price changes can distort the metric, and past performance may not indicate future payouts. Some investors prefer a dividend payout ratio for analyzing future dividend sustainability.

2. Is a high dividend yield good?

A company's dividend yield substantially exceeding peers' may signal risks, warranting further analysis of the firm's financial health and dividend sustainability. Dividends are not guaranteed and are subject to change or elimination.