Most investors love dividends. Here is why — dividends have accounted for roughly one-third of the S&P 500’s total return over nearly a century. Investors often rely on dividend payments to help keep up with inflation and for additional income into their retirement years. Most of the great growth-engine stocks of recent decades do not offer much for dividend investors who want to rely on safety and income.
S&P Global itself has shown that dividends have accounted for more than one-third of the total return of the S&P500 for the last 90 years. Investors who want to keep up with inflation and who want additional retirement income need to consider high dividends. In particular, this means dividends with yields comparable to longer-dated Treasuries and also handily above normalized inflation rates.
OGGONOMICS SEES DIVIDEND OPPORTUNITIES
Oggonomics has scoured the S&P 500 to find companies with high dividends with two primary characteristics. First — dividend yields near or above the 10-year Treasury yield (4.45% on last look). The 10-year Treasury yield is now handily above the average of the last 20 years. Second — dividend yields handily above the average annualized inflation rate. The annualized inflation rate in April-2026 was 3.8% according to the U.S. Labor Department, and the simple average annualized inflation in the last 20 years was 2.3%.
These high-dividend stocks also have other metrics to consider. They screened as “undervalued” based on several items:
- relative earnings (P/E) versus peers,
- recent or longer-term stock underperformance,
- Wall Street consensus expectations,
- and financial flexibility to reward investors further in the years ahead.
Don’t forget a key Oggonomics mantra — Always a bull, you’re a fool! Always a bear, you’re broke! That can be true in “safe” gool old dividend stocks. Even Treasury notes and bonds can fall in value.
Investors should also never forget that there is no such thing as a free lunch in the capital markets. Interest rates and inflation can always go higher. Stocks can slide lower, even those with a long history of dividends. Economic disruption can get in the way of many classical investment objectives.
DON’T MISS THE BOAT
Investors need to be proactive. Consider what happens if/and when investors wait to invest after interest rates eventually come back down to more “neutral” levels? At that point, the 10-year could be 1 full percentage point lower. That yield could fall even further if the Federal Reserve lowers interest rates more aggressively. Waiting until that time could be a classic “missed the boat” strategy.
The S&P500 alone won’t cut it for dividend and income investors. It barely has a 1% dividend yield at the present time. This is due to extreme weighting of tech/growth overpowering the rest of the nation’s large corporate weightings in the index. And nearly 20% of the S&P500 index members are not even paying any dividends at the present time. This means the beloved $SPY ETF alone does not pay out enough income to outpace inflation or longer-term interest rates.
What if the economy slows down, or what happens when stock market leaders experience a major correction? The great growth stocks have led the stock market surge in recent years, and they have outperformed dividend stocks. Long-term investors should consider history as a guide to consider what happens if growth loses its luster. What if the market decides that their valuations are unsustainable or their growth rates start to mature? Hint — Companies with slowing growth rates and no dividend safety net generally experience much larger stock drops versus companies with long operating histories and a long history of stable or rising dividends.
5 HIGH-YIELD DIVIDENDS TO CONSIDER
The screen of high-yield dividends hit some of the classic defensive sectors for income investors: Telecom, Utilities, Consumer Products, Infrastructure, Real Estate.
AT&T Inc. (NYSE: T)
Market Cap: $171 billion
Dividend Yield: 4.7%
Price/1-Yr Range: $24.00 ($22.95 – $29.79)
Analyst Price Target: $30
AT&T needs no introduction. It now has a simpler business model of subscription-based wireless and fiber communications without the media properties any longer in the mix. It’s also the largest US telecom operator with 120 million-plus mobile connections and over 75 million post-paid subs. AT&T also acquired Lumen’s residential fiber broadband network (Mass Markets fiber business) for about $5.75 billion after the deal closed in early-2026. Wall Street sees growth for years ahead in return on capital, return on equity, rising operating margins and higher free cash flow. One recent analyst downgrade from Oppenheimer cited coming broadband competition from SpaceX. That risk may not exactly be a “new” concern now that its stock has pulled back about 20% during 2026.
AT&T is trimming expenses where it can while also spending billions to repurchase $20 billion worth of shares from 2025 through 2027. Morgan Stanley recently reintroduced a $30 price target. BofA has an even-higher price objective of $34, rating it the firm’s top telecom pick on best mix of wireless and fixed assets. AT&T’s lower financial leverage and higher earnings expectations may even give cover to start hiking its dividend after the current capital allocation plan is expected to end in 2027.
FirstEnergy (NYSE: FE)
Market Cap: $27 billion
Dividend Yield: 4.0%
Price/1-Yr Range: $45.50 ($39.28 – $52.34)
Analyst Price Target: $52
FirstEnergy is one of the nation’s largest investor-owned electric systems. This is not the highest dividend yield in the utilities, but its 4% payout is close enough to the 10-year yield to merit consideration. It serves over 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. Its transmission subsidiaries operate about 24,000 miles of transmission lines in the Midwest and Mid-Atlantic regions. $FE has had its share of regulatory rate case problems, but its key Ohio legal troubles are now in the rearview mirror.
FirstEnergy’s stock has so far been unable to break out from its $50 peak for more than a decade and has significantly underperformed large-cap utilities peers over that same decade. Does that represent a potential breakout potential for its investors when and if interest rates come back down? FirstEnergy has also been able to begin hiking its dividend in the last two years after it was limited to 3 1/2 years of a steady dividend. As earnings are expected to rise, that may give cover for even higher dividend payouts beyond 2027. TD Cowen recently raised its rating to Buy with a $53 price target; and even BofA’s Neutral rating comes with a $53 price objective.
Kimberly-Clark Corporation (NYSE: KMB)
Market Cap: $32 billion
Dividend Yield: 5.3%
Price/1-Yr Range: $97.50 ($92.42 – $144.23)
Analyst Price Target: $112
Kimberly-Clark is one of the top consumer products companies and it has a mantra of “Better Care for a Better World.” Investors may not have felt “better care” due to recent underperformance versus larger consumer products giants, along with negative equity performance for 10 years. Its stock screens as “undervalued” on a P/E basis versus large-cap consumer products peers as sales have dipped in recent years while operating earnings have flatlined. Wall Street has lowered expectations to very modest expectations and analysts are generally expecting earnings to remain at stable levels before an eventual recovery.
Kimberly-Clark has some optionality in its vast portfolio of brands and products (Huggies, Kleenex, Scott, Kotex, Cottonelle, Depend, Pull-Ups, Goodnites, Intimus, and others). It could pursue bolt-on acquisitions or take the “value creation” via sales or spin-offs if it chooses. Being in the defensive consumer products is boring compared to major growth opportunities, but long-term investors have a strong dividend at a peer-discount here that can help pay for waiting. $KMB has now paid a dividend for 92 consecutive years, and 2026 marked the 54th consecutive year that the consumer company has raised its dividend.
ONEOK Inc. (NYSE: OKE)
Market Cap: $55 billion
Dividend Yield: 4.9%
Price/1-Yr Range: $87.00 ($64.02 – $96.07)
Analyst Price Target: $94
ONEOK is one of the oldest and most respected players in the oil and gas infrastructure sector. Its focus is on Natural Gas Gathering and Processing, Natural Gas Liquids and Natural Gas Pipelines in the south-central areas of the United States. ONEOK owns a 50% interest in Northern Border Pipeline and Roadrunner Gas Transmission, and in early 2025 it acquired EnLink Midstream for about $4.3 billion using stock rather than cash.
ONEOK’s most recent dividend hikes may be smaller hikes than in the past, but it is expected to keep boosting dividends after the company boosted its annual guidance. $OKE shares peaked above $115 at the end of 2024, leaving substantial upside potential beyond the consensus analyst price target if its business strengths merit a re-rating under continued strength in business expectations.
Mid-America Apartment Communities, Inc. (NYSE: MAA)
Market Cap: $15.5 billion
Dividend Yield: 4.7%
Price/1-Yr Range: $130 ($120.30 – $156.71)
Analyst Price Target: $140
Mid-America Apartment Communities has operated since 1994 with nearly 300 apartment properties in 16 states (and no exposure to California). Many retirees and wealthy investors love to own apartments for stable-to-rising rental income as “mailbox money.” And people have to live somewhere, right? It should also be a direct winner ahead if interest rates come back down to neutral (or lower) levels.
Mid-America has a history of raising its dividends. The apartment owner takes pride in that the REIT has never reduced or suspended its quarterly dividend in more than 30 years as a public company. The valuation of 2.7-times book value is in the middle of the pack for large-cap apartment REITs. $MAA is down about 40% from its highs in 2022 when interest rates were much lower. While Scotiabank downgraded $MAA to Underperform on sub-par Sunbelt rental growth rates, but BofA has a Buy rating with a $162 price objective.
BUT WAIT… THERE’S MORE, MAYBE…
There is also a slew of companies with high dividend yields that could have made this list. Some of the companies are experiencing significant earnings pressure or have been facing other issues that might scare some investors. And Wall Street is less optimistic on their near-term or long-term upside potential based on current share prices and valuations. Oggonomics has not conducted more in-depth reviews of these additional stocks.
Here are 10 more S&P500 stocks with strong dividend yields that may merit re-reviews if and when their investor metrics and Wall Street expectations (and interest rate expectations) may seem to be turning:
- Campbell’s ($CPB) — 7.2% yield
- Pfizer ($PFE) — 6.7% yield
- Verizon ($VZ) — 6% yield
- Altria ($MO) — 6% yield
- United Parcel Service ($UPS) — 5.9% yield
- Comcast ($CMCSA) — 5.5% yield
- Clorox ($CLX) — 5.5% yield
- International Paper ($IP) — 5.5% yield
- Best Buy ($BBY) — 5.5% yield
- Prudential Financial ($PRU) — 5.4%
Investors can always choose to use exchange-traded funds like the State Street SPDR Portfolio S&P 500 High Dividend ETF ($SPYD) if they want to spread out risk and diversify their income strategy. The $SPYD ETF tracks 80 high-yield stocks of the S&P 500 and currently yields about 4.2%. That said, some more risk-averse investors may not want to own many of the companies that make up this index.
One last consideration is the ProShares S&P 500 Dividend Aristocrats ETF ($NOBL). This ETF’s “dividend aristocrats” are companies in the S&P 500 with generally 25 consecutive years of dividend hikes. This sounds lovely on the surface, but its 2.1% dividend yield falls handily short of long-term Treasury yields and does not match the normalized historical inflation rate.
