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Tickers in this Article: SPY, T, VZ, COP, PSX, XOM, CVX, APA, APC, MO
It's well known that in this environment of depressed/frozen interest rates, cash investments and U.S. Treasuries just aren't going to get the job done for income investors. Unfortunately, the S&P 500 is only barely better when it comes to yield. The SPDR S&P 500 (NYSE: SPY), which is the largest S&P 500 tracking ETF, currently yields a meager 2%. A mere 24, or less than 5% of the total index, currently yield 5% or more, according to Finviz data. A third of that group, or eight stocks, hail from the boring utilities and telecommunications sectors. Then again, boring has been beautiful these days, so let's have a look at a few of the more compelling options among the S&P 500 5% yield club.


The Dow component now yields 5.2%, 40 basis points than primary rival and fellow Dow constituent Verizon (NYSE: VZ). AT&T hasn't been the best of performers over the past five years, which is disappointing given that investors typically hold telecom stocks for extended periods of time. However, shares of AT&T are showing some signs of life. Since the start of the second quarter, the stock is up 8.4% compared to an almost 7% drop for the S&P 500.

ConocoPhillips (NYSE: COP):

ConocoPhillips has gone from being the third-largest U.S. oil company to the largest U.S. independent oil and gas producer following its spin-off its downstream business, Phillips66 (NYSE: PSX) earlier this quarter.

Texas-based ConocoPhillips retained the $2.64 annual payout it had as an integrated firm and with its stock price lower as a result of the spin-off; the shares currently yield 5.1%. That's vastly superior to what you'll find with the other U.S. integrated plays such as Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) and the dividends of other independents such as Apache (NYSE: APA) and Anadarko Petroleum (NYSE: APC) also pale in comparison to what Conoco offers.

Going forward, the company is tasked with increasing oil production to the point where cash flow is robust enough to support future dividend increases, something some analysts are skeptical the company can do.

Altria (NYSE: MO):

Smoking is a habit plenty of folks don't approve of and with good reason, but this quintessential sin stock has smoked the S&P 500 since the start of the second quarter with a gain of 3.7% and that doesn't factor in a 5.1% yield. The maker of the Marlboro brand hasn't raised its dividend yet this year, but don't fret. This is a "like clockwork" dividend stock. Altria has raised its payout 45 times in the past 43 years, so it's almost a sure bet the dividend will be increased by the end of this year.

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