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During a period of high interest rates, it might be more difficult to impress investors with dividend stocks. But the stocks can have an important advantage over the long term. The dividend payouts can increase over the years, helping to push share prices higher over time.
When considering stocks for dividend income, yield shouldn’t be the only thing you consider. If a stock’s price has tumbled because investors are worried about the company’s business prospects, the dividend yield might be very high. A double-digit yield might mean investors expect to see a cut to the dividend soon.
There are many ways to look at companies’ expected ability to maintain or raise their dividend payouts. But one can also take a simple approach to begin researching stock choices.
At the moment, you can get a bank CD with a yield of close to 5% pretty easily. Here’s a look at current yields for CDs and U.S. Treasury securities and an approach for laddering them not only to protect your cash but to hedge against interest-rate risk.
For investors who would rather aim for long-term growth to go along with dividend income, or take a relatively conservative approach to growth while reinvesting dividends, a screen of stocks in the S&P 500
SPX,
produces only 10 stocks with dividend yields of 4.5% or higher with majority “buy” or equivalent ratings among analysts polled by FactSet. Here they are, sorted by dividend yield:
| Company | Ticker | Dividend Yield | Expected payout increase through 2025 | Share “buy” ratings | April 16 price | Consensus price target | implied 12-month upside potential |
| Comerica Inc. |
CMA, |
6.56% | 10% | 58% | $43.30 | $60.53 | 40% |
| Citizens Financial Group Inc. |
CFG, |
5.77% | 12% | 74% | $29.10 | $39.29 | 35% |
| Healthpeak Properties Inc. |
PEAK, |
5.71% | 9% | 60% | $21.01 | $27.69 | 32% |
| Hasbro Inc. |
HAS, |
5.34% | 8% | 69% | $52.40 | $69.27 | 32% |
| Philip Morris International Inc. |
PM, |
5.11% | 11% | 67% | $99.48 | $113.56 | 14% |
| Realty Income Corp. |
O, |
5.04% | 7% | 56% | $60.77 | $70.00 | 15% |
| Fifth Third Bancorp |
FITB, |
4.99% | 3% | 72% | $26.44 | $34.55 | 31% |
| VICI Properties Inc. |
VICI, |
4.82% | 12% | 95% | $32.35 | $37.73 | 17% |
| Organon & Co. |
OGN, |
4.71% | 5% | 55% | $23.80 | $31.89 | 34% |
| Iron Mountain Inc. |
IRM, |
4.69% | 15% | 78% | $52.76 | $56.00 | 6% |
| Source: FactSet | |||||||
Click on the ticker for more about each company.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
The dividend yields for this group of 10 companies are based on current annual regular payout rates, with all paying quarterly except for Realty Income Corp.
O,
which pays monthly.
These two oil and natural gas producers would have passed the above screen based on their most recent dividend payments and analysts’ sentiment, however, they pay a combined fixed-plus-variable dividend every quarter, with the fixed portion relatively low:
-
Shares of Pioneer Natural Resources Co.
PXD,
-0.77%
closed at $230 on April 14. Among analysts polled by FactSet, 59% rate the stock a “buy” or the equivalent, and the consensus price target is $257.42. The company pays a fixed quarterly dividend of $1.10 a share, which would make for a dividend yield of only 1.91%. However, the most recent variable quarterly dividend was $4.48 a share, for a combined quarterly dividend of $5.58, which would translate to an annualized dividend yield of 9.70%. The consensus estimate for dividends in 2025 is $4.63 — the analysts are only estimating the fixed portion of the dividend. Pioneer has held preliminary merger discussions with Exxon Corp.
XOM,
-1.16% ,
according to a Wall Street Journal report. -
Devon Energy Corp.’s
DVN,
-0.72%
stock closed at $55.70 on April 14. The shares are rated “buy” or the equivalent by 55% of analysts and the consensus price target is $67.66. The fixed portion of Devon’s quarterly dividend is 20 cents a share, for an annualized dividend yield of 1.44%. The variable portion of the most recent quarterly dividend was 69 cents a share. The total payout of 89 cents would make for an annual dividend yield of 6.39%. Analysts expect the fixed portion of annual dividends to total $3.61 in 2025, according to FactSet.
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