The dividend yield on the S&P 500 has been hovering near its lowest level in roughly two decades for some time now, and while it’s starting to move higher, it’s still at a paltry 1.7%. So what are yield-hungry investors left to do?
Thankfully, there is no shortage of high-paying dividend stocks on Wall Street. And in a time of market volatility, like we’ve seen throughout 2022, quality income-paying names can be used as a defensive play in portfolios.
“We have continued to highlight the importance of dividends in the current backdrop, where we have seen wide performance spreads between dividend payers versus non-payers,” says Jill Carey Hall, equity and quant strategist at BofA Securities. Looking specifically at small-cap stocks, Carey notes that “dividend yield has been the best-performing long factor” for the year-to-date.
However, not all dividend stocks are created equal, and it can be a dangerous practice for investors to simply chase yield. Many times, a company’s high yield can be a sign of trouble in its underlying business.
With that in mind, we’ve selected 10 high-paying dividend stocks with yields of 5% or more. However, we didn’t just randomly pick names, though. To put together a list of quality firms, we looked for companies with solid fundamentals, generous yields and backing from the analyst community. Investing in sturdy dividend stocks remains a favorite strategy on Wall Street and these ones are worth a closer look.
Data is as of Sept. 19. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks are listed in order of yield, lowest to highest.
- Market value: $4.3 billion
- Dividend yield: 5.3%
Douglas Emmett (DEI, $20.97) is a real estate investment trust (REIT) that owns 18.1 million square feet of Class A office space and 4,577 apartment units in Los Angeles and Honolulu. DEI stock has had a rough go of it on the charts, down more than 37% for the year-to-date. However, this could just create an opportunity to get one of Wall Street’s favorite high-paying dividend stocks at a discount.
Raymond James analyst William Crow has an Outperform (Buy) rating on DEI stock with a $28 target price, more than 38% above its current share price. Crow believes that the REIT’s office markets have bottomed and are in a slow climb out of a large hole caused by COVID-19 and work-from-home.
“[W]e continue to have a positive view of most of Douglas Emmett’s submarkets, its portfolio, sound balance sheet, and experienced management team, which has …….