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

Altria Group

• Market value: $82.0 billion
• Dividend yield: 8.2%
• Analysts' consensus recommendation: Hold 

Altria Group (MO (opens in new tab)) is one of two stocks on our list that isn't an independent oil & gas exploration and production company. 

The deal with Altria is that there isn't much growth to be found in the U.S. tobacco business. And so the company known for Marlboro cigarettes and Copenhagen dipping tobacco has to keep shareholders happy with generous and reliable dividends.

But dividends are only part of the story when it comes to Altria's status as a defensive stock. Sales of its addictive products tend to hold up well when economic times get tough. MO stock also tends to trade with much lower volatility relative to the broader market.

Those characteristics – as well as a dividend yield of more than 8% and 13 straight years of dividend increases – make MO a pretty good place to hide in a bad market. By the same token, however, defensive stocks like Altria tend to underperform in rising markets.

That's certainly been the case in 2023. MO stock was down 2.8% on a total return basis (price change plus dividends) for the year-to-date through April 20. The S&P 500, by comparison, generated a total return of 8.1% over the same span,

Analysts as a group expect Altria to continue to underperform the market over the next 12 to 18 months. Their consensus recommendation stands at Hold, according to S&P Global Market Intelligence (opens in new tab). 

Lincoln National

• Market value: $3.5 billion
• Dividend yield: 8.6%
• Analysts' consensus recommendation: Hold 

Lincoln National (LNC (opens in new tab)) is an example of a stock whose dividend yield has soared because its price has plunged. Indeed, LNC stock has shed nearly a third of its value so far in 2023. 

It's also the only other stock on our list that doesn't juice its yield with variable dividends.

Profitability and the company's ability to maintain its dividend are among market participants' top concerns. Although the life insurance and retirement services firm's annuities business recorded a $1.3 billion operating profit in 2022, its life insurance unit posted an operating loss of $1.9 billion. 

"We expect LNC’s annuities line to benefit from an uptick in demand for annuities, particularly fixed annuities," notes CFRA Research (opens in new tab) analyst Catherine Seifert. "But our Hold recommendation on the shares reflects our cautious stance regarding LNC’s underwriting profitability."

Jefferies (opens in new tab) analyst Suneet Kamath rates shares at Underperform (the equivalent of Sell), adding LNC is the "least preferred name" in his coverage universe. "We remain unconvinced shares have found a floor, and see risk to the current dividend," the analyst adds. 

Of the 14 analysts covering LNC tracked by S&P Global Market Intelligence, one rates it at Buy, 11 say Hold, one has it at Sell and one rates it at Strong Sell. That works out to a consensus recommendation of Hold, with a negative tilt. 

Devon Energy

• Market value: $35.0 billion
• Dividend yield: 9.4%
• Analysts' consensus recommendation: Buy 

Devon Energy (DVN (opens in new tab)) is an independent oil and gas producer with operations centered primarily in the Delaware Basin. 

Like its peers, Devon is awash in free cash flow thanks to persistently high global oil prices. As a result, it's been lavishing that cash on shareholders in the form of dividends and share buybacks.

In Devon's case, it generated free cash flow of $1.3 billion for the 12 months ended December 31, 2022 – and that was after paying out $448 million in dividends. 

Keep in mind that the energy business is punishingly cyclical. The good times for energy stocks won't last forever. And Devon's 2023 price chart is certainly a reminder of that.

Shares have recovered somewhat since OPEC in early April announced a surprise cut to its crude oil production target. And yet DVN stock was still off about 13% for the year-to-date through April 20, reflecting concerns about future crude prices and the firm's ability to keep funding its generous variable dividends going forward.

That said, Wall Street remains bullish on the name, assigning it a consensus recommendation of Buy, albeit with mixed conviction. Of the 31 analysts covering DVN tracked by S&P Global Market Intelligence, 12 rate it at Strong Buy, five say Buy, 13 have it at Hold and one calls it a Sell.

With an average target price of $66.21, the Street gives DVN stock implied price upside of almost 25% in the next 12 months or so. Add in the projected dividend yield, and the implied total return comes to around 34%.

Coterra Energy

• Market value: $19.5 billion
• Dividend yield: 8.0%
• Analysts' consensus recommendation: Hold 

Shares in Coterra Energy (CTRA (opens in new tab)) are lagging the broader market so far in 2023, hurt by worries about whether it can continue to fund its generous variable dividends amid an unclear outlook for energy prices and rising recession fears.

Heck, Coterra said it plans to favor share repurchases over variable dividends in 2023, so don't be surprised to see its yield slip in the future. 

The company expects to generate $1.9 billion in free cash flow this year. That sounds great, except that last year the oil company generated levered free cash flow of $2.8 billion – and that was after paying out almost $2 billion in dividends.

No wonder analysts don't expect CTRA stock to revert to its market-beating ways anytime soon.

Of the 28 analysts covering the independent oil and gas firm tracked by S&P Global Market Intelligence, five rate it at Strong Buy, two say Buy, 21 have it at Hold and one calls it a Strong Sell. That works out to a consensus recommendation of Hold. 

For what it's worth, the Street's average price target tells another story. At $29.92, analysts give CTRA implied price upside of about 17% in the next 12 months. Add in the projected dividend yield, and the implied total return comes to about 25%.

Pioneer Natural Resources

• Market value: $52.6 billion
• Dividend yield: 12.1%
• Analysts' consensus recommendation: Buy 

No stock in the S&P 500 has a higher dividend yield than independent oil and gas company Pioneer Natural Resources (PXD (opens in new tab)). 

And it's no longer because of a depressed share price. 

PXD stock had lost as much as a fifth of its value for the year-to-date at one point in March, but then a couple of fortuitous catalysts came along. First, OPEC+ cut its oil production target in early April, which helped all oil and gas stocks. Then, about a week later, news broke that Exxon Mobil (XOM (opens in new tab)) held preliminary talks about a potential takeover of PXD.

PXD stock was down just 2% on a price basis for the year-to-date through April 20, pushing the dividend yield down to 12.1% from an all-time peak of nearly 15% in mid-March. 

And, for now at least, PXD's dividends keep coming. For the first quarter of 2023, the company declared a quarterly base-plus-variable dividend of $5.58 per share, consisting of a $1.10 base dividend and $4.48 variable dividend.

Wall Street was bullish on PXD stock's potential to beat the broader market this year even before the company became an acquisition target. Needless to say, analysts are even more bullish now, giving shares a consensus recommendation of Buy. 

With an average price target of $255.06, the Street gives PXD stock implied price upside of 17% in the next 12 months or so. Add in the projected dividend yield, and the implied total return comes to about 29%.