“Nobody Ever Went Broke Taking a Profit” – Grab The Highest-Yielding S&P 500 Stocks Right Now

view original post

A Wall Street maxim states, “Twenty percent of investors who want to make money are in stocks, while the other 80 percent who want to keep their money are in bonds.” This broad, brushstroke description summarizes why the fixed-income market is significantly larger than the equities market. Another maxim, which is less cerebral but probably the best Wall Street quote ever, is “Nobody ever went broke by taking a profit.” With the stock market making all-time highs almost daily, it’s high time for many investors (not all) to take some money off the table and shift some capital to high-yielding, quality dividend stocks. These stocks will outperform when interest rates start to come down, and depending on who you listen to on Wall Street, that could be either two or perhaps even three times before the end of the year. 

24/7 Wall St. Key Points:

• Fed Governor Christopher Waller is once again calling for a July rate cut
• While others agree, it still seems like the first cut will come in September
• The surprise may be the Fed cutting rates by 50 basis points instead of the anticipated 25 basis points
• Are the highest yelding S&P 500 stocks a good fit for you? Why not schedule a meeting with a financial advisor near you for a complete portfolio review today? Click here to get the ball rolling today. (Sponsored)

Why do we cover the highest-yielding S&P 500 dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past 50 years (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

We screened the list for the highest-yielding stocks in the venerable index. We then analyzed those companies, identifying the ones with the most significant upside potential relative to Wall Street’s price targets. Five companies appear to be outstanding ideas, and remember, “Nobody ever went broke taking a profit.”

The AES Corporation

The AES Corporation is an American utility and power generation company. This conservative utility stock offers a hefty dividend and considerable upside potential. AES Corporation (NYSE: AES) and its subsidiaries operate as a diversified power generation and utility company in the United States and internationally. According to a report by Bloomberg, the company is considering selling itself after receiving takeover interest from large investment companies, including BlackRock’s (BLK) Global Infrastructure Partners unit and Brookfield Asset Management.

The company owns and operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and operates utilities to develop or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.

It uses various fuels and technologies to generate electricity, such as:

• Coal
• Gas
• Hydro
• Wind
• Solar
• Biomass
• Renewables comprising energy storage and landfill gas.

The company owns and operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.

JPMorgan has an Overweight rating on the shares with a massive $14 price target.

Altria

Altria is one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. This tobacco company offers value investors a compelling entry point and a generous dividend yield. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.

The company provides cigarettes primarily under the Marlboro brand;

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand.

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer. Earlier this year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

Stifel has a Buy rating with a $63 target price.

LyondellBasell

LyondellBasell is a global leader in developing and supplying materials that enable packaging, health, and transportation solutions. This blue-chip chemical giant offers a long history of strong performance. LyondellBasell Industries N.V. (NYSE: LYB) operates as a chemical company in:

• the United States
• Germany
• Mexico
• Italy
• Poland
• France
• Japan
• China
• the Netherlands
• Internationally

The company operates in six segments:

• Olefins and Polyolefins-Americas
• Olefins and Polyolefins-Europe, Asia, International
• Intermediates and Derivatives
• Advanced Polymer Solutions
• Refining Technology

It produces and markets olefins and co-products, including polyethylene and polypropylene, propylene oxide and its derivatives, oxyfuels and related products, as well as intermediate chemicals such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol.

In addition, the company produces and markets compounding and solutions, including:

• Polypropylene compounds
• Engineered plastics, masterbatches
• Engineered composites, colors, and powders
• Advanced polymers, including catalloy and polybutene-1
• Refines heavy, high-sulfur crude oil, other crude oils, and refined products, including gasoline and distillates

Furthermore, it develops and licenses chemical and polyolefin process technologies, manufactures and sells polyolefin catalysts, and serves applications in food packaging, home furnishings, automotive components, and paints and coatings.

Wells Fargo has an Outperform rating with a $85 target price objective.

Pfizer

Pfizer was established in 1849 in New York by two German entrepreneurs. This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes, but has been crushed over the last two years as many people have not received boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It pays a dependable dividend, which has risen yearly for the last 14 years.

The company offers medicines and vaccines in various therapeutic areas, including:

• Cardiovascular, metabolic, and women’s health under the Premarin family and Eliquis brands
• Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
• Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands.

Pfizer also provides medicines and vaccines in various therapeutic areas, such as:

• Pneumococcal disease, meningococcal disease, and tick-borne encephalitis
• COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
• Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
• Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands

Pfizer anticipates full-year 2025 revenues in the range of $61.0 to $64.0 billion. This includes the expectation that revenues from COVID-19 products in 2025 will be broadly consistent with those in 2024, after excluding approximately $1.2 billion of non-recurring revenue for Paxlovid in 2024.

Jefferies has a Buy rating with a $33 target price objective.

Verizon

Verizon Communications Inc., commonly known as Verizon, is an American multinational telecommunications company that continues to offer tremendous value. It trades 9.13 times its estimated 2026 earnings and is up almost 10% in 2025. Verizon Communications, Inc. (NYSE: VZ), through its subsidiaries, provides a range of communications, technology, information, and entertainment products and services to consumers, businesses, and government entities worldwide.

It operates in two segments:

• Verizon Consumer Group
• Verizon Business Group
• The Consumer segment provides wireless services across the United States through Verizon and TracFone networks, as well as through wholesale and other arrangements.

It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones
• Tablets
• Smartwatches and other wireless-enabled connected devices

The segment also offers wireline services in the Mid-Atlantic, Northeastern United States, and Washington, D.C., through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice

Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.

Tigress Financial has given the company a “Buy” rating and a price target of $56.

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.