Investors are having to maneuver and pivot in their investments now that the election is over. The so-called “Trump-Effect” has been in play after the major indexes rose about 5% in a week after the Presidential results came in. One problem stumping investors is that some very easily recognized stocks have not performed with as much enthusiasm as the market. And some great high-yield dividend payers are included.

Tactical Bulls believes that strong dividends can significantly boost a portfolio’s returns over time. Those dividends do admittedly tend to help more during periods of slower gains and in consolidation than they do in a wild bull market. Those same dividend payers, particularly if they have enjoyed earnings growth and been held for very long periods of time, can also act to significantly boost your retirement income.

One concern is that long-term interest rates have stayed higher rather than come down even as the Federal Reserve is cutting rates. The yield on the 10-year Treasury is still up around 4.40% and the 5-year yield of 4.3% is not much lower. Long-term investors look out 5 to 10 years to consider which stocks have more earnings power (higher EPS) so that they can use older and lower share prices to determine their effective dividend yields. What may have a 4% yield at the time of purchase, after years of dividend hikes and stock appreciation, might be more like a 9% or 10% effective yield to that same investor years down the road after dividend hikes.

Tactical Bulls has screened the 20 highest dividends in the S&P 500 Index and applied some actual future earnings power to these companies. Just be advised that there are absolutely no assurances that these dividends will rise. There are also absolutely no assurances that the share prices will rise or stay the same. And don’t forget that each ex-dividend date sees the share price fall by the same dividend payment being made.

Tactical Bulls has no investment opinion and no formal ratings or price targets on any of these companies. This is not intended to be invest advice nor is any of the information to be interpreted as a recommendation to buy or sell these or other securities. Also included is a year-to-date (YTD) return to see how each has performed against the broader market. These dividend payers all have a history of payouts and they have only been listed from high to low in the order of their dividend yields.

Walgreens Boots Alliance
Dividend Yield: 12.3%
YTD Return: -65%

Walgreens Boots Alliance Inc. (NASDAQ: WBA) is only being represented here because it has the highest yield of all S&P 500 stocks. It has the same $0.25 dividend each quarter but the business has been bad enough for long enough that it already cut the payout nearly in half from late in 2023. The high dividend was talked about back then, so many have to wonder if a 12% or so yield is really safe for a company trying to turn its ship around and closing so many stores. With the highest yield in the S&P 500 by far, some investors might rightfully be worried that yet another dividend cut is a risk due to such major stock pressure.

Altria Group, Inc. (NYSE: MO)
Dividend Yield: 7.3%
YTD Return: 35%

Altria continues to ebb and flow with smokeless tobacco and combustible tobacco products like cigarettes and cigars and it has oral tobacco products. The tobacco giant also said in its recent dividend announcements that it will continue to reward shareholders through a growing dividend and share repurchases while making investments. When it hiked the payout in August, Altria said it was the 59th dividend hike in the past 55 years.

Verizon
Dividend Yield: 6.7%
YTD Return: 7.2%

Verizon Communications, Inc. (NYSE: VZ) had performed well up until October, but its proposed $20 billion pricey acquisition of Frontier Communications is being faced off with some investors wanting more for the fiber optics giant. Prior to that deal, Verizon is paying about 22% of its operating income out in debt servicing expenses. The penny-plus hike to the quarterly payout of $0.6775 in September marked Verizon’s 18th consecutive annual dividend hike.

Pfizer
Dividend Yield: 6.4%
YTD Return: -9%

Pfizer Inc. (NYSE: PFE) had been holding its own after the generic spin-off, but its shares rolled over and drifted from $30 to $26 in the last month or so. The new administration is pledging to end much of the government’s wasted spending. Whether or not that includes Big Pharma’s key drugs in every aspect remains to be seen. That is how some investors are betting at the present. Pfizer does have 15 years of consecutive dividend hikes and its Viatris spin-off after completing the merger of its Upjohn unit and Mylan is now several years in the past. One interesting aspect currently is that even the cautious analyst reports have price targets up around the $32.60 consensus target price.

Ford Motor Company
Dividend Yield: 5.3%
YTD Return: -7%

Ford Motor Co. (NYSE: F) chooses to return capital via dividends as the founding Ford family loves those payouts. It has been on a very choppy path in 2024 and just seems caught somewhere between GM and Tesla other than its Ford F-150 trucks that are so popular. Whether or not it can grow earnings beyond $2.00 per share remains to be seen, but that is valuing the operation at less than 6-times future earnings.

Dow
Dividend Yield: 6.2%
YTD Return: -17%

Dow Inc. (NYSE: DOW) is one of the top chemical stocks in the U.S. but a slower economy and high input prices and labor costs have sent its shares south so far in 2024. Dow also does not get that many analyst calls, and when it does they are usually trimming their price targets down slightly on each call. Shares are closer to $45 now and the prior peak of $70 was seen briefly in 2022.

Franklin Resources
Dividend Yield: 5.75%
YTD Return: -28%

Franklin Resources, Inc. (NYSE: BEN) has suffered from poor performance and seen some setbacks after shutting down a $2 billion fund and placing its co-Chief Investment Officer on leave. And it has faced investor outflows in wake of a CFTC probe. Still, this large asset management firm is about 80 years old and it is the highest dividend yield of any bank or asset manager in the S&P 500.

AES Corp.
Dividend Yield: 5.15%
YTD Return: -28%

The AES Corporation (NYSE: AES) has the highest dividend yield of the S&P 500 utilities sector. That said, AES is much more diversified in power generation and electric utility operations in the United States, Brazil, Argentina, Mexico, and elsewhere with minority and/or majority interests in wind, solar, hydro and storage assets. This makes for a lot of moving parts and it is harder to analyze than a tradition U.S. power utility with a single region of operations. There should be room for dividend hikes if its earnings live up to expectations, but there are too many moving parts for this to be an easy-to-analyze outfit like most of its S&P peers.

AT&T
Dividend Yield: 5.05%
YTD Return: 32%

AT&T Inc. (NYSE: T) claims more than 100 million individuals and 2.5 million businesses as customers. Its shares have been recovering in the last year, but that is still down from $30 right before the pandemic. It is paying about 28% of its operating income out as interest expenses so it should be a winner if the Fed gets aggressive about rate cuts ahead. That is still an “if” at the moment. It did trim the dividend in 2022 but investors have moved on from it as the business is now easier to analyze with fewer moving parts with forecasts of a lower debt load.

United Parcel Service
Dividend Yields: 5.00%
YTD Return: -16%

United Parcel Service, Inc. (NYSE: UPS) is currently going through its shares of ups and downs in the business cycle. Despite a drop of 16% looking bad so far in 2024, that’s down more than 40% since 2022. Citi recently maintained its Buy rating and trimmed its target to $158 from $163, but the independent research firm Argus also recently upgraded its rating to Buy from Hold with a $150 price target after meaningful revenue and earnings recovery that appears to have finally turned the page on disappointing results.