Income investors must be drooling these days.
The percentage of S&P 500 companies paying dividends is sitting at 83% — the highest level in 15 years, according to FactSet. And Q2’s $82 billion in dividend payments ranked as the second-largest quarterly amount in the past decade.
Of course, these amped-up dividends also might be a reason for concern when you consider earnings growth hasn’t really justified the increase in payouts. According to Michael Farr of CNBC, earnings growth for the most recent quarter was close to zero if you back out the strong financial sector.
No wonder, then, that the aggregate dividend payout ratio in the S&P 500 is sitting at its highest level (32%) since mid-2010 after rising for six straight quarters.
So while it’s nice to get paid, investors should take care not to be too overly wowed by big-number dividend yields, as a few of them are starting to look iffy. To wit, here are three companies with juicy yields worth a deeper look: