8 Dividend-Stocks with over 6% yield + Plenty of Problems

A handful of companies in the S&P 500 are sporting dividend yields above 6%.

But “sporting” might be too generous. Flashing--waving a red flag?

Because a dividend that high, especially today, is usually a warning sign. It often means a company is in trouble—or that investors are bracing for a cut. These stocks are the opposite of the “Magnificent Seven.” Call them the “Suspicious Eight.”

Still, the temptation is real. The median yield for this group is 6.3%. If a stock’s price stays flat, that doubles your money in just 11 years. And there are success stories. AT&T’s stock price is up 84% over the past two years. Add in dividends, and investors are sitting on a 106% return. That rally has pulled its yield down from danger-zone levels into a more respectable 4%.

So is there another AT&T waiting in the weeds? Let’s walk through the current list. But keep this in mind: this is more financial autopsy than investment playbook. While dividends are a powerful investing tool, there are far better ways to tap them than chasing today’s highest payers.

Why Dividends Matter More Than You Think

Right now, the S&P 500 yields just 1.1%—the lowest since the dot-com bubble. That’s partly because stock prices are stretched, and partly because companies are hoarding cash. Last year, dividends were only 36% of profits—20 points below the long-term average since 1926, according to Hartford Funds.

Here’s why that matters. Since 1960, reinvested dividends have accounted for 85% of the S&P 500’s cumulative return. Most of us aren’t investing for 65 years, but the math still adds up. By decade, dividends have averaged about 34% of total returns. And in the lean years, they’ve carried the load—67% of returns in the 1940s, 73% in the 1970s.

In contrast, the 2010s saw dividends contribute only 17% of returns, and so far this decade just 12%. But if today’s lofty valuations signal weaker returns ahead, dividends will once again matter more.

The Problem With Chasing Big Yields

Here’s the catch: history shows that the fattest dividends aren’t the best ones. Wellington Management found that stocks with moderate yields have outperformed high-yielders over time. Even better are companies with rising dividends. Ned Davis Research reports that from 1973 to 2024, dividend growers returned 10.2% annually on average—compared with 6.8% for stagnant payers, 4.3% for nonpayers, and negative returns for dividend cutters.

The Sus 8

LyondellBasell (LYB) – Yields 11.3%, the highest of the group. But the chemical maker is stuck in a polyethylene glut, and its expected free cash flow won’t cover the dividend. J.P. Morgan warns the cycle hasn’t bottomed yet, and a cut is possible. Rival Dow already slashed its dividend in July.
United Parcel Service (UPS) – Yields 7.8%. UPS is battling a tariff-driven demand slump while ditching billions in low-margin Amazon business. It’s also slashing headcount and closing facilities in its biggest capacity reduction ever. Management insists the dividend is “rock solid strong,” and Raymond James thinks cost cuts will pay off when the economy rebounds.
Conagra Brands (CAG) and Kraft Heinz (KHC) – Yields of 7.3% and 6.1%, respectively. Both are seeing profits slide as packaged-food giants face inflation, consumers trading down, and insurgent niche brands. GLP-1 weight-loss drugs are also denting demand. Kraft Heinz plans to split its Heinz/Mac & Cheese arm from Oscar Mayer/Lunchables next year, while keeping dividend spending intact. But remember, Kraft cut its payout once already—in 2019.
Healthpeak Properties (PEAK) and Alexandria Real Estate Equities (ARE) – Both REITs yield 6.3%. They funnel rent into dividends, with drug companies as major tenants.
Pfizer (PFE) – Yields 6.3% after a two-day, 14% stock jump. The rally came after a deal with the Trump administration to offer discounted drugs via TrumpRx.gov, easing investor fears of a harsher pricing crackdown. BMO Capital’s Evan Seigerman noted: “[Trump] seemed very happy about it, and Pfizer was singing his accolades.”
Altria (MO) – Yields 6.2%. Shares are up more than 30% this year, double the S&P 500’s gain. It’s making progress in oral nicotine pouches, but still trails Philip Morris in smoke-free products. UBS cautions that price hikes on cigarettes are masking falling volumes.
Ford (F) – Yields 6.1%. Benefiting from an EV buying rush ahead of an expiring tax credit in September. Shares are up more than 30% this year.
Verizon (VZ) – Yields 6.4%. Once AT&T’s twin in investor disappointment, Verizon is pushing into fiber broadband and fighting to stabilize its wireless business. The bull case is juicy income. The bear case: you’re buying into a stock I myself was bullish on just a few months ago.