Don't kick yourself if you didn't load up on investments returning 5% on your cash last year. They still can be found — even inside the S&P 500.
Seven stocks in the S&P 500, including Altria, Healthpeak Properties and Verizon Communications, still yield 6% or more annually, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
But there's no question fat yields are harder to find. The yield on the 10-year Treasury is down to 4.27% from 4.92% last October. Even rates on high-yield savings accounts are closer to 4% now — as 5% was possible less than a year ago.
Investors are already anticipating the Federal Reserve to cut rates this year. "Rate cuts are going to show," said Rahul Nambiampurath of Trading.biz.
But 5% yields can be found.
Falling Yields All Around
High-yield savings accounts and 10-year Treasuries are putting 5% yields in the rearview mirror. But you can still land them. Be prepared to take more risk, though.
Junk bonds of risky issuers are paying up. But you must also accept the odds of default. The SPDR Bloomberg High Yield Bond ETF is still yielding 6.42%. That's only down from 6.88% in October of last year. Additionally, SPDR SSGA Ultra Short Term Bond ETF is still yielding 4.65%, up from 4.02% in October 2023.
But don't think 5% yields are the norm in other spots of the fixed-income spectrum.
The yield on the SPDR Portfolio Long Term Treasury ETF is down to 3.52%. It was yielding nearly 3.7% last October. And the benchmark iShares Core U.S. Aggregate Bond ETF is yielding just 3.19%.
Dropping S&P 500 Yields
Even finding 5% or higher yields from S&P 500 stocks is getting more difficult. But they can be found.
Two dozen S&P 500 stocks are yielding 5% or more. That's down from more than 50 that yielded that much a year ago.
Some of the high yielders are stock price winners, too. Tobacco firm Altria is yielding 8.75%. That's still the highest yield in the S&P 500 despite falling from 9.8% a year ago. Verizon Communications' stock is a total return winner if you add its 6.6% yield to its 7.5% year-to-date gain this year.
Most of the high yields, though, come at a steep price: falling stocks. That's the case at real estate firm Healthpeak Properties. Yes, it yields 6.8%. But its shares are also down 10% this year.
So if you do find a 5% yield in this market, it's important to know what the catch is.
Top S&P 500 Yielders
| Company | Ticker | Year-to-date % ch. | Yield % |
|---|---|---|---|
| Altria Group | 11.4% | 8.75% | |
| Healthpeak Properties | -10.1% | 6.82 | |
| Verizon Communications | 7.5% | 6.63 | |
| AT&T | 2.5% | 6.44 | |
| Kinder Morgan | 2.7% | 6.26 | |
| Boston Properties | -5.9% | 6.08 | |
| Pfizer | -3.4% | 6.06 |
