Written By

Sheikh Hasib Ahmed

Only 11 stocks' dividends can outperform Treasuries' yield of 4.68% 

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4.68% yields on Treasury bonds are achievable with low risk. Therefore, the yield needed to be exceptional in order to even evaluate S&P 500 firms that pay dividends.

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Research by Investor's Business Daily of information from S&P Global Market Intelligence and MarketSmith reveals that only 11 S&P 500 equities pay CD-busting yields of 7% or higher,

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including utilities PG&E (PCG), Pioneer Natural Resource (PXD), and V.F. (VFC). That would probably be the lowest dividend return that investors would agree to in exchange for taking on stock risk.

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The difficulty for investors seeking income is also that. The S&P 500 has a difficult time offering compelling dividend yields.

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Also difficult to surpass is the 4.7% risk-free rate on 10-year Treasury bonds (or even 5% on CDs). It might be challenging to find dividend stocks worth your time.

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"Our advice to investors is to avoid falling victim to the stock market's popularity contest and feeling pressured to buy particular stocks just because everyone else is doing it.

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Fundamentals, cash flows, and dividends should all be taken into consideration, according to The Bahnsen Group's chief investment officer, David Bahnsen.

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Why are stable dividend yields in the S&P 500 so uncommon? It's interesting to note that the strong performance of the S&P 500 this year is pushing down dividend yields.

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The current yield of the S&P 500 is a pitiful 1.4%. This is a decrease from the 1.6% yield it had earlier in the year. The 12% increase in the index this year lowers the yield.

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That's because the method used to compute yields causes yields to decrease as prices increase. As a result, yields increase as stock prices decline.

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