There was little change among the top dividend stocks in the S&P 500 this month. The same steady names continued to throw off the highest dividend yields, even as those dividend yields continued to trend down.
Indeed, for the first time since we started tracking these dividend stocks, the top dividend yield among stocks in the S&P 500 fell below 10%. True, that’s still a gusher of a dividend yield, but the decline underscores the effect of rising stock prices on dividend stocks.
Markets keep notching all-time highs — the Dow Jones Industrial Average just crossed 17,000 for the first time in history — and that weighs on dividend yields. (As with bonds, prices and yields on dividend stocks move in opposite directions.)
The dividend yield on the S&P 500 now stands at 1.91%, down from 1.93% a month ago and 2.1% at this time last year. The decline among the hottest dividend stocks has been even steeper.
The utilities sector — this year’ market darling — is a fountain of dividends. But share-price appreciation has dented the sector’s dividend yield for new money. Around this time last year, the dividend yield on the Dow Jones Utility Average was 3.02%. Today, that dividend yield is down to 2.71%.
The dividend stocks in the S&P 500 with the highest dividend yields still offer plenty of income for new money, but not nearly as much as they did just a few months ago.
To get a sense of the best dividend yields to be found among dividend stocks, here are the top 10 S&P 500 dividend stocks for July. (Note: Dividend yields are as of July 14.)