Investing
The 5 Highest-Paying S&P 500 Dividend Stocks All Yield 5% or More
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Investors love dividend stocks because they not only provide dependable income but also give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends and distributions realized over a given period. In other words, the total return on an investment or a portfolio includes both income and stock appreciation.
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We screened our 24/7 Wall St. research database looking for companies in the S&P 500 that were rated Buy at major Wall Street firms that also paid the highest dividends in the venerable index. We found five that look like great ideas for income-oriented investors looking for some upside appreciation as well. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
The companies are listed here in order of dividends payouts.
ONEOK
The solid price of natural gas over the past year has helped to lift this top energy company. ONEOK Inc. (NYSE: OKE) primarily engages in natural gas transportation, storage and natural gas and natural gas liquids (NGLs) gathering, processing and fractionation in the Bakken, Mid-Continent and Permian. The company recently closed the roll-up of its underlying master limited partnership, ONEOK Partners.
The company has a strong presence in the Oklahoma SCOOP/STACK (NGL gathering/takeaway system, G&P), the Williston Basin (G&P, NGL takeaway) and the Permian Basin (NGL gathering, NGL takeaway, natural gas takeaway), which the RBC team feels provides high-return growth opportunities.
Many on Wall Street remain very positive on the company’s primarily fee-based earnings, which account for 90% of total earnings.
Investors receive a 6.93% dividend. Wells Fargo has a $59 price target, and the Wall Street consensus target is $52.47. ONEOK stock closed trading on Friday at $53.95 per share.
24/7 Wall St.Altria
This maker of tobacco products offers value investors a great entry point now and was hit recently as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
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Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In March 2008, it spun off its international cigarette business to shareholders. In December 2018, the company acquired 35% of Juul Labs, and it has purchased a 45% stake in cannabis company Cronus for $1.8 billion.
BofA Securities analysts are very favorable toward the company’s plans for the future and noted this recently:
Management presented at CAGNY (Consumer Analyst Group of New York) where it discussed a new corporate focus on ESG, additional details on its IQOS plans and its “Moving beyond smoking” 10-yr plan. Smokeables (cigarettes/cigars) will remain an important part of its strategy, providing funding behind its long-term growth and shareholder returns. Over the last 5-yrs, smokeable and other comprehensive income grew at a 5.5% compounded annual growth rate despite volume declines.
Shareholders now receive a 6.91% dividend. The BofA Securities target price is $58, well above the $48.87 consensus target. Altria stock was last seen at $49.77 a share on Friday.
Lumen Technologies
This under-the-radar stock has big total return potential. Lumen Technologies Inc. (NASDAQ: LUMN) is a facilities-based technology and communications company that provides various integrated services and solutions under CenturyLink name to business and residential customers in the United States and internationally.
The company operates offers IP and data services, including VPN data network, Ethernet, internet protocol (IP), and content delivery services. It also offers transport and infrastructure services comprising high bandwidth optical networks; unlit optical fiber networks, and related professional and management services; private line services, a direct circuit or channel specifically dedicated for connecting two or more organizational sites; colocation and data center services; and consulting services, which include network management, installation and maintenance of data equipment, and building of proprietary fiber-optic broadband networks for government and business customers.
Investors receive a 6.78% dividend. The surprising $12 Wells Fargo price target is greater than the consensus target of $10.83, but the stock closed above both levels on Friday at $14.75.
Williams Companies
This top energy company is also a solid pick for more conservative investors looking for exposure to liquefied natural gas. Williams Companies Inc. (NYSE: WMB) operates as an energy infrastructure company primarily in the United States.
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Its Transmission & Gulf of Mexico segment comprises Transco and Northwest natural gas pipelines, as well as natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing and fractionation activities in the Marcellus Shale region, primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio.
The West segment comprises gas gathering, processing and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana and the Mid-Continent region, which includes the Anadarko, Arkom, and Permian basins. It also includes NGL and natural gas marketing operations, as well as storage facilities.
The company owns and operates 30,000 miles of pipelines, 34 processing facilities, nine fractionation facilities and approximately 23 million barrels of NGL storage capacity.
Shareholders receive a 5.87% dividend. Credit Suisse recently raised its price target on Williams Companies stock to $29 from $27. The consensus target is $28.19, and the shares closed at $27.95 on Friday.
Kinder Morgan
This is another top energy stock and remains a favorite across Wall Street. Kinder Morgan Inc. (NYSE: KMI) operates as an energy infrastructure company in North America. The company operates through the following segments.
The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipelines and underground storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas liquefaction and storage facilities.
The Products Pipelines segment owns and operates refined petroleum products and crude oil and condensate pipelines, as well as associated product terminals and petroleum pipeline transmix facilities.
The Terminals segment owns or operates liquids and bulk terminals that store and handle various commodities, including gasoline, diesel fuel, chemicals, ethanol, metals and petroleum coke. It also owns tankers.
The CO2 segment produces, transports and markets CO2 to recover and produce crude oil from mature oil fields, and it owns interests in or operates oil fields and gasoline processing plants, as well as operates a crude oil pipeline system in West Texas. It owns and operates approximately 83,000 miles of pipelines and 144 terminals.
Shareholders receive a 5.75% dividend. Mizuho has raised its price target by a buck to $21. The $17.95 consensus target for Kinder Morgan stock is less than Friday’s closing print of $18.78.
These are the five highest-yielding S&P 500 stocks that have Buy ratings from top Wall Street firms. They provide investors great total return potential, and with three in the red-hot energy sector, any of these could be just the right idea now for investors looking to take positions or increase exposure.
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