4 of the Highest Yields in the S&P 500 That Are Actually Covered
A fat yield on a screen means nothing if the dividend collapses the moment you own it. These four S&P 500 names sit near the top of the yield table and still generate enough cash to back every payment up.
The top of the S&P 500 yield table is where income investors go looking first, and it is also where the market prices in its worries. A big yield often signals a share price that has fallen because investors expect a dividend cut. The four index members below clear a stricter test: each funds its dividend from cash the business generates, with a balance sheet that can carry it. The group’s highest payer, Verizon Communications (NYSE: VZ | VZ Price Prediction), yields 6.18%, and its free cash flow covers that payout with room to spare.
Verizon Communications: Free Cash Flow Covers the Biggest Yield Here
Verizon is one of the largest U.S. wireless and broadband carriers and a component of the Dow Jones Industrial Average. At 6.18%, it is the only ultra-high-yield name on this list. That yield comes with a rising share price: the stock trades at $44.78, up 24.56% over the past year, and still trades at about 9 times forward earnings.
Coverage: In the second quarter, Verizon generated $6.43 billion of free cash flow, up 27.1% year over year, against $2.954 billion in dividends paid. For full-year 2025, operating cash flow of $37.137 billion minus capital spending of $17.461 billion left $19.676 billion of free cash flow, against $11.481 billion in dividends. Even after the payout, the company completed $3.5 billion of buybacks through the first half.
Track record: The quarterly dividend is now $0.7075 per share. It has risen every year since 2019, climbing in steps from $0.6025.
Why the payout holds: The business is gaining momentum. Verizon added 184,000 postpaid phone subscribers in the second quarter, compared with a loss of 9,000 a year earlier, and its fiber broadband base reached 10.9 million. The shares were rising in premarket trading Monday after a subscriber surge impressed Wall Street. Adjusted EBITDA margin widened to 40.1% from 37.1%.
Risk: The Frontier acquisition added debt. Total unsecured debt stands at $136.5 billion, and net unsecured debt to adjusted EBITDA rose to 2.5x from 2.2x at the end of last year. Paying that down will compete with dividend growth for cash, so expect small raises.
Realty Income: A Monthly Check That Rising Rates Have Discounted
Realty Income (NYSE: O) is a real estate investment trust (REIT) that owns free-standing, single-tenant commercial properties in the United States, Puerto Rico, and the United Kingdom on net leases, where tenants cover most property costs. It pays monthly and yields 5.67%, which makes it a high-yield name.
Part of that yield comes from a lower share price. The stock sits at $56.91, below its 52-week high of $66.25 and its 200-day average of $61.69. The pullback followed a rise in Treasury yields that raised the cost of capital for rate-sensitive landlords. Over the same stretch, occupancy held at 98.8%.
Coverage: REITs measure dividend capacity with adjusted funds from operations (AFFO), a cash-earnings figure that adds back depreciation. Second-quarter AFFO was $1.09 per share, against monthly dividends that totaled $0.8115 for the quarter. Full-year AFFO guidance of $4.44 to $4.45 per share sits well above the $3.252 annualized dividend. On a market-price basis, the 7.18% runs ahead of the dividend yield.
Track record and balance sheet: The second-quarter raise was the company’s 115th consecutive quarterly dividend increase, and the next monthly payment is $0.2715. Realty Income carries a Fitch “A” rating with a stable outlook, and net debt runs at 5.4x annualized pro forma adjusted EBITDAre.
Why the payout holds: Thousands of leases spread the risk, rent recapture on re-leased properties came in at 102.7%, and new growth channels include a $6 billion hyperscale data center joint venture.
Risk: Tenant credit. About 65.7% of annualized base rent comes from non-investment-grade tenants, and credit-loss provisions reached $46.4 million in the first half. A retail downturn would show up here first.
Altria Group: Tobacco Cash Flow That Keeps Funding Raises
Altria Group (NYSE: MO) sells Marlboro cigarettes in the U.S. and a growing line of smoke-free products, including on! nicotine pouches and NJOY vapes. It yields 5.57%, a high yield that has held up even as the stock climbed 35% this year to $74.24.
Coverage: Tobacco needs very little reinvestment. In 2025, operating cash flow of $9.29 billion minus capital spending of $216 million left $9.074 billion of free cash flow, against $6.96 billion in dividends. Quarterly cash flow swings with tax and settlement timing. Second-quarter operating cash flow was $719 million, following the same seasonal dip as a year earlier at $205 million, so the full year is the right lens. Second-quarter adjusted EPS of $1.48 also cleared the $1.06 quarterly dividend paid at the time.
Track record and balance sheet: Altria has raised its quarterly dividend every year since 2009, from $0.32 to the current $1.11, with the latest increase from $1.06. Stockholders’ equity is negative at -$2.62 billion, a result of years of buybacks and dividends, while cash stands at $2.37 billion.
Why the payout holds: Pricing power, the smokeable segment runs an adjusted operating margin of about 65%, and Altria returned nearly $3.9 billion to shareholders in the first half.
Risk: Shrinking volume. Domestic cigarette industry volumes are falling about 5%, and Marlboro’s retail share slipped to 39.5%. Price increases can offset that for years, but not forever.
Kinder Morgan: The Lowest Yield With the Strongest Momentum
Kinder Morgan (NYSE: KMI) is one of the largest energy infrastructure companies in North America, moving natural gas through pipelines and charging fees that work like tolls. It yields 3.51%, the lowest here, because the stock gained 35.86% over the past year to $34.28. A rising price pulls the yield down, which is the healthy way for a yield to shrink.
Coverage: Second-quarter free cash flow of $978 million covered $665 million in dividends. For 2025, operating cash flow of $5.917 billion minus capital spending of $3.026 billion left $2.891 billion, above the $2.604 billion paid out.
Track record and balance sheet: The quarterly dividend has risen every year since 2019, from $0.25 to the current $0.2975, which the board declared again for the next payment. Net debt to adjusted EBITDA sits at 3.6x, and Moody’s upgrade to Baa1 puts the company at a BBB+ equivalent across all three agencies.
Why the payout holds: Demand for gas is climbing. The $9.6 billion project backlog is 92% natural gas, with more than 60% tied to power generation and utility demand, including data centers and LNG exports. Cheap natural gas could benefit pipeline operators like Kinder Morgan by encouraging more use.
Risk: Construction spending is eating into the cushion. In the third quarter, operating cash flow of $1.59 billion minus capital spending of $1.045 billion left $545 million, short of the $665 million dividend. Full-year coverage remains intact, but watch whether new projects start producing cash on schedule.
Where These Four Fit in a Retirement Income Plan
Each pays out less cash than it brings in, and each has raised its dividend steadily for years. Verizon offers the most current income, Realty Income the most frequent paycheck, Altria the fastest raises, and Kinder Morgan the most growth behind a smaller yield. Together, they suit retirees and near-retirees who want reliable, rising checks from businesses that pay dividends from operating cash rather than borrowed money. They don’t suit anyone hunting for the highest number on a yield screen.
Contact [email protected] for any questions or corrections.
Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
