The S&P 500's Dividend Yield Is the Lowest It's Been in Over 2 Decades. Here's Where You Can Lock in Much Higher Yields.

Core Insights - The S&P 500 has increased by 35% over the past year, leading to a decline in its dividend yield from 1.7% to approximately 1.2%, the lowest in over 20 years [1] - A $10,000 investment in the S&P 500 now yields about $120 in dividends, compared to $170 a year ago, indicating a significant drop in income generation [2] Realty Income - Realty Income offers a dividend yield of over 5.5% and has a history of paying 653 consecutive monthly dividends, with 127 increases since its public listing in 1994, growing at a 4.3% compound annual rate [3][4] - The company distributes about 75% of its cash flow as dividends and retains the rest for new investments, supported by a strong balance sheet [4] - Realty Income plans to invest approximately $3.5 billion in new properties this year and has acquired Spirit Realty for $9.3 billion, which is expected to increase cash flow per share by nearly 5% [5] Kinder Morgan - Kinder Morgan has a dividend yield of nearly 4.5% and has increased its payouts for seven consecutive years [6] - The company generates stable cash flow, with 68% of earnings being take-or-pay or hedged, ensuring revenue regardless of commodity prices [6] - Kinder Morgan pays out just over 50% of its cash flow as dividends, retaining the rest for expansion projects, with over $5 billion in secured projects expected to come online by the end of 2028 [7] Verizon - Verizon's current dividend yield exceeds 6.5%, with 18 consecutive years of annual payout increases, the longest in the U.S. telecom sector [8] - The company generated $26.5 billion in cash flow from operations in the first nine months of the year, covering its capital expenditures and dividend payouts [9] - Verizon is heavily investing in expanding its 5G and fiber networks, including a $20 billion acquisition of Frontier Communications, which is expected to enhance earnings through cost savings [10] Investment Opportunities - Realty Income, Kinder Morgan, and Verizon provide significantly higher dividend yields than the average S&P 500 stock and have strong records of increasing payouts, making them attractive options for income-focused investors [11]