Dividend investors could use the S&P 500 listed companies as a source to search for high yield dividend stocks. It combines the concept of high yield dividend-paying stocks and the S&P 500 index includes about 80% of the value of the entire U.S. stock market and major US companies. The S&P 500 index includes about 80% of the value of the entire U.S. stock market
Top-10 S&P 500 dividend stocks
Although the average of all S&P 500 stocks is 1.89% (see chart), the top-10 dividend yield is currently between 6.9% and 12.8%.
Here are the current top 10 dividend yields:
1. CenturyLink (12.8%)
CenturyLink, Inc. is a major U.S. telecom that grew over the past decade with acquisitions including Qwest and Level 3 Communications. It serves both business and residential customers. CenturyLink is one of the S&P 500’s worst performers in 2019. The stock is down 16% year to date and off 40% in the latest 12 months. This is reflected in and probably explaining the high dividend yield.
2. Macy’s (9.9%)
Macy’s, Inc., is an omnichannel retail organization. The company sells a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. It operates approximately 680 department stores under the Macy’s and Bloomingdale’s names.
3. L Brands (9.5%)
L Brands, Inc. operates as a specialty retailer of women’s intimate and other apparel, beauty and personal care products, home fragrance products, and accessories. The company operates in three segments: Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works.
4. Macerich (9.3%)
Macerich, an S&P 500 company, is a fully integrated, self-managed and self-administered real estate investment trust (REIT), which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States.
5. Altria (8.0%)
Marlboro cigarette maker Altria has been a great dividend stock over the last decades. However, it faces continuingly lower volume due to the global awareness of the health effects of tobacco and smoking. The company focus is on launching a smokeless tobacco product in the U.S.
6. Iron Mountain (7.5%)
Iron Mountain’s services is the global leader for storage and information management services (data centers). Trusted by over 90% of the Fortune 1000 around the world, and with a real estate network of more than 90 million square feet across more than 1,450 facilities in approximately 50 countries. Iron Mountain is in fact a REIT.
7. Kraft Heinz (7.4%)
The Kraft Heinz Company is a very well-known food and beverage company. Kraft Heinz is engaged in the manufacturing and marketing of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Furthermore, Warren Buffett Kraft Heinz owns around $10 billion of this dividend stock.
8. Invesco (7.1%)
Invesco is a well-known gloval asset manager with over $1 trillion in assets under management, providing many famous investment funds.
9. Helmerich & Payne (7.0%)
Helmerich & Payne, Inc. primarily engages in drilling oil and gas wells for exploration and production companies. As with any company in the space, the underlying price of oil will have a major impact on the performance of this stock.
10. Occidental Petroleum Corp. (6.9%)
As Helmericj & Payne, Occidental Petroleum is active in the oil sector. It engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. Occidental Petroleum was the last months in the new for the $38 billion acquisition of Anadarko Petroleum. Mozambique is targeting $880 million in capital gains tax from the takeover of Anadarko Petroleum by Occidental Petroleum.
S&P 500 Index Methodology
Standard & Poor created the S&P 500 in 1957. The S&P 500 is probably the most well-known index and containing the 500 largest companies in the US when measured by market capitalization.
The S&P 500 Index also has other criteria, including:
- Universe: All constituents must be U.S. companies.
- Eligibility Market Cap: Companies with a market capitalization of US$8.2 billion or greater.
- Public Float: Companies must have a float market cap of at least US$ 4.1 billion. (50%)
- Financial Viability: Companies must have positive as-reported earnings over the most recent quarter, as well as over the most recent four quarters (summed together).
- Adequate Liquidity and Reasonable Price: Consists of highly tradable common stocks, with active and deep markets.