The S&P 500 index is packed full of dividend stocks -- in fact, about 85% of the 500 companies in the index pay dividends. The average dividend payer currently yields 2.6%, but there are some companies that pay much more than that. Let's take a look at the 10 highest-paying S&P stocks, as well as a brief description of each one.
Two types of high-dividend stocksThe average dividend yield among the top 10 is an impressive 6.58%, but there are two main varieties of stocks that pay high dividends.
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Some are solid companies with bright futures, which simply have been beaten down due to market conditions. For example, Conoco Phillips pays a 6.02% dividend yield as a result of its share price dropping more than 40% over the past year.
Other stocks on the list are mainly oriented toward producing income, so their yields are naturally high. For instance, HCP is a real estate investment trust, or REIT, specializing in healthcare properties. By definition, REITs are required to distribute at least 90% of their taxable income to shareholders, so it makes sense that the stock's dividend yield is over 6%. REITs and telecommunications stocks tend to be income-oriented, so it makes sense that they comprise six of the top 10.
The article 10 Highest-Yielding S&P 500 Stocks originally appeared on Fool.com.
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