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

One industry in particular dominates the list of stocks with the highest dividend yields in the benchmark index.

illustration of dividend stocks with highest yield
(Image credit: Getty Images)

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 just happened with Newell Brands (NWL).

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 went down to 3.2% 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 the stocks with the highest dividend yields in the S&P 500 today. 

Three of the following five stocks with the highest dividend yields in the S&P 500 hail from the oil and gas sector. Be aware that their dividend yields are unusually elevated these days for a couple of reasons: 1) oil stocks are under pressure amid a slump in prices for crude oil; 2) they pay both base and variable dividends.

As for oil prices, note that international benchmark crude was down about 10% for the year-to-date through early June. Over the past 52 weeks, it was off by roughly 35%.

Meanwhile, here's the deal with variable dividends: energy companies found themselves swimming in cash over the past couple of years because of persistently high oil and gas prices. But since that party could end at any time – energy prices are cyclical, after all – a number of firms turned to offering variable dividends. 

Variable dividends allow firms the flexibility to increase or decrease the amount of cash they return to shareholders as their free cash flow rises or falls. Although investors can pretty much bank on base dividends, a downward adjustment to variable dividends will cause these highly attractive yields to come back down to Earth.

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 June 5, 2023, courtesy of YCharts and S&P Global Market Intelligence. Stocks are listed by dividend yields, from lowest to highest.

Dan Burrows
Senior Investing Writer,

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.