Income is becoming easier to find as interest rates rise.
In fact, if the current path of interest rate hikes predicted by Federal Reserve policymakers holds true, the “risk-free” yield of a 10-year Treasury bond should exceed 4% by the end of 2023.
However, some income investors want more. They may look to the world of junk bonds, where for some additional risk they can access yields which significantly exceed those found in Treasurys. Closed-end fund and master-limited partnerships are other traditional sources of higher yields.
Investors with an even greater taste for risk and the willingness to try something new may also find double-digit yields in the crypto-driven universe of decentralized finance.
However, dividend stocks remain among the most popular investment income sources available to investors today, and with many sectors and indices falling into bear market territory in 2022, dividend yields have risen.
Here are the 10 highest-yielding dividend stocks in the S&P 500 at market open on June 27, according to Factset.
No. 10—Williams Companies (WMB)—5.7%
Based in Tulsa, Okla., Williams is an energy infrastructure provider operating primarily in the natural gas processing space. It has a market cap of $37 billion and trades at a price-to-equity ration (P/E) of 24.9.
No. 8—Devon Energy Corp. (DVN)—6.7% (tie)
Devon Energy is a Oklahoma City.-based oil and natural gas exploration company. The stock currently trades at a 10.1 P/E ratio, and the company has a nearly $38 billion market cap.
No. 8—Kinder Morgan (KMI)—6.7% (tie)
Based in Houston, Kinder Morgan is another energy infrastructure provider focused around oil and gas pipelines. With a $38 billion market cap, KMI trades at a P/E ratio of 36.4.
No. 7—Simon Property Group (SPG)—6.8%
Simon Property Group is an Indianapolis-based real estate investment trust (REIT) specializing in malls and outlet centers. SPG trades at a 15.2 P/E ratio, even though such measures of valuations are not as important for REITs, and has a nearly $38 billion market cap.
No. 6—ONEOK (OKE)—6.9%
ONEOK is yet another energy infrastructure provider based in Tulsa, Ok. and focused around production and deliver of natural gas. OKE has a $25 billion market cap and a P/E ratio of 16.3.
No. 5—Vornado Realty Trust (VNO)—7.1%
Formed in Maryland but based in New York, Vornado is a REIT specializing primarily in Manhattan office and retail buildings. Though P/E ratios aren’t quite as relevant for REITs, it trades at 46.5 P/E and has a $6.5 billion market cap.
No. 4—Pioneer Natural Resources (PXD)—7.8%
Another company focused on hydrocarbon exploration, Pioneer Natural Resources is based in Irving, Texas. PXD has a $55.6 billion market capitalization and trades at a 13.6 P/E ratio.
No. 3—Coterra Energy (CTRA)—7.9%
Coterra Energy is a Susqehanna County, Pa.-based energy resource exploration concern. At the time of writing, CTRA has a $21.7 billion market capitalization and a 12.3 P/E ratio.
No. 2—Altria Group (MO)—8.3%
Headquartered in Henrico County, Va., right outside of the city of Richmond, Altria is a producer of tobacco products. MO has a P/E ratio of 26.4 and a market capitalization of nearly $79 billion.
No. 1—Lumen Technologies (LUMN)—8.9%
Monroe, La.-based Lumen Technologies provides communication, network, cloud and security services. LUMN has a rock-bottom P/E ratio of 5.5 and a $11.8 billion market cap.
