9 Highest Dividend-Paying Stocks in the S&P 500 | Investing

The S&P 500 just closed its strongest first quarter since 2019, up 10.2% and marking yet another record high for the index.

In such an environment, investors would be forgiven for prioritizing growth stocks over slow-and-steady dividend payers. But if you’re at or near retirement, there’s a tremendous benefit to choosing income-oriented dividend stocks that offer a significant payday, since you’re not relying on harvesting share appreciation to generate cash.

Think of it this way: If you can generate 6% on a $500,000 portfolio, you harvest $30,000 annually in dividends without making a single additional trade.

The following list of the highest dividend-paying stocks in the S&P 500 all offer those kinds of paydays, with yields ranging between 5.7% and 8.8%:

A $60 billion chemicals and materials giant, 3M produces specialty products ranging from adhesives to sealants to lubricants. This massive portfolio has more than 60,000 products in it and serves just about every industry out there. It makes things that can be found everywhere from dental offices to automotive manufacturers to the toolboxes of electricians and plumbers. This diversification provides a strong baseline for revenue, as individual product sales can wax and wane without altering the overall performance of the company. That admittedly makes it hard for MMM stock to post a breakout year, but the structure lends itself to steady income. As proof, the company has an amazing history of 64 years of consecutive dividend increases that is among the longest on Wall Street.

Trailing annual dividend yield: 5.7%

Crown Castle is one of several real estate firms that make up the current list of the highest dividend stocks in the S&P 500 right now. That said, it may not be involved in the kind of real estate that you may think of first as an investor. That’s because CCI commands more than 40,000 cell towers and another 90,000 or so miles of fiber optic network. This nationwide portfolio of telecom infrastructure is vital to the modern economy and to the customers who pay Crown Castle for connectivity. As a result, the company has ramped up dividends from 35 cents per quarter at the start of 2014 to $1.57 per share currently. That’s a great sign for future payout potential from this current dividend leader.

A few years ago, Pfizer was firing on all cylinders. The stock jumped about 67% across 2021 thanks to the timely development of a COVID-19 vaccine as well as its resilient nature as a health care stock that stood strong as other riskier sectors fell out of favor with investors. Lately, however, PFE has had a rough go of things. Part of that is thanks to fears that its drug pipeline may be in trouble – particularly its obesity drug that is struggling to garner as much buzz as the highly popular Ozempic from rival Novo Nordisk (NVO). That said, Pfizer has a long tradition of consistently generous dividends. Its penny-per-share boost in January to a dividend of 42 cents makes the yield 68% higher than where it was 10 years ago. Recent share performance is disappointing, with the stock down about 27% in the last year while the S&P 500 has posted a gain of about 32%. But its big yield might make this Big Pharma stock worth a bargain purchase at current lows.

Boston Properties Inc. (BXP)

Don’t be fooled by the name alone, because real estate firm Boston Properties is much bigger than just one city. At $10.3 billion in market value, it currently ranks as the largest publicly held developer of “class A” office properties in the U.S. This term covers top-tier commercial real estate that can compete for prestigious clients and command above-average rents. BXP focuses primarily on urban markets such as Boston, Los Angeles, New York, San Francisco and Washington, D.C. With more than 50 million square feet across roughly 200 properties, it has the footprint to provide potentially generous dividends. But there’s a catch: In the post-COVID world, demand for pricey office space isn’t what it used to be. Credit ratings firm Moody’s noted as much in a December downgrade of BXP’s debt, ringing alarm bells for the fact that leases representing 14% of revenue will expire in 2025. If BXP can weather this rough spot, it could pay off. But if not, the big-time dividend may be in big-time trouble come 2026.

Energy companies can be notoriously dependent on commodity prices, as many oil and gas firms make big profits when prices are high and see lean times when they are low. That was the case in 2023, and refiners like Marathon Petroleum Corp. (MPC) and explorers like Diamondback Energy Inc. (FANG) have about tripled the S&P 500 so far this year. Kinder Morgan is not like these stocks, however, operating as a “midstream” oil and gas company that maintains some 83,000 miles of pipelines and 140 terminal facilities across the U.S. This more stable business model fuels consistent earnings as well as consistent dividends. At the end of 2023, KMI closed a more than $1.8 billion acquisition of STX Midstream to expand its empire even further, which bodes well for the future payout potential of this S&P 500 stock.

Though it has long been one of the leading dividend stocks in the S&P 500 index, iconic telecom firm AT&T has been trying to reshape its business over the last few years to adapt to the demands of the modern economy. That began with a restructuring in 2022 to streamline its operations, jettison its ill-advised focus on media by spinning off its stake in Warner Bros. Discovery Inc. (WBD), and investing heavily in faster internet speeds through a fiber optics network and its 5G internet service via its Internet Air offerings. Though shares have lagged behind the market in 2023, they have kept pace pretty well lately, with a 6.6% total return so far in 2024. And while there are assuredly some higher-growth investments out there, AT&T’s 27.75-cent-per-share dividend remains only about half of its earnings – an encouraging sign that the generous payouts are sustainable for the foreseeable future.

Verizon Communications Inc. (VZ)

Another sleepy telecom with a big dividend yield, Verizon is similar to AT&T in that its massive and entrenched business may not have a ton of growth ahead, but it certainly has the income potential to put other stocks in the S&P 500 to shame. It also offers a dividend that is slightly better from a sustainability perspective, since it carriers a slightly lower debt burden and a slightly better credit rating. It’s also worth considering that while AT&T has kept its payout steady since a 2022 restructuring, VZ has seen its dividend on the rise – including last year, which marked its 17th year running with such increases.

Healthpeak Properties Inc. (DOC)

Previously known as HCP, Healthpeak was already a leading health care real estate firm before a massive merger with Physicians Realty Trust. Now, the combined company owns and operates a diversified portfolio of health care real estate that includes medical office buildings, lab space, retirement communities and similar properties. These locations generate regular rental income, which in turn fuels steady cash flow to pay an attractive and sustainable dividend. Shares have stagnated over the last year, thanks to a rising interest rate environment resulting in increased borrowing costs. What’s more, most investors have been enamored with high-growth tech stocks rather than yield-rich real estate plays lately. But if you’re in it for the long haul, this health care powerhouse is a steady source of income with a built-in customer base.

A longtime leader among the highest dividend-paying stocks in the S&P 500 dividend, tobacco giant Altria again tops the list as we finish up the first quarter. With iconic legacy brands including Marlboro cigarettes, Black & Mild pipe and cigar products, and smokeless tobacco like Copenhagen and Skoal complemented by newer offerings such as NJOY e-cigarettes and Helix oral nicotine pouches, this “sin stock” has a long history of generating consistent and reliable yield from its product portfolio. In addition to a massive current yield, the stock has logged 55 consecutive years of dividend increases to prove that the current payout may only get more generous over time, too.