Income investors are taking blows from all sides. Sure, they’ve become accustomed to paltry yields on bonds and savings products, but now stocks are making new all-time highs — meaning dividends yields are coming down.
Around this time last year, the dividend yield on the S&P 500 was 2.17%. That’s not even chicken feed, but hey, it still was a good half-percentage-point better than a 10-year T-note.
Cut to today, and the yield on the S&P 500 is down to 1.94%. The 10-year? Up to 2.75%.
The good news is that benchmark bonds are supposed to yield more than the broader market. The bad news is that yields on both asset classes are still pathetic. After all, the 10-year expected inflation rate is 1.73% — trivial on a historic basis, but it brings real dividend rates down to practically zilch. Once you factor in inflation, the yield on the S&P 500 comes to 0.23%.
Fortunately, plenty of individual stocks still throw off healthy dividend yields — and some are downright gushers of income — at least in this rate environment. So which stocks in the S&P 500 pay the highest dividend yields? Read on to find out: