My November Investment Plan: Buy the Highest-Yielding S&P 500 Stocks

"Investors love dividend stocks, especially those with high yields, because they provide a substantial income stream and offer significant total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. At 24/7 Wall St., we consistently emphasize the potential of total return to our readers."

"With the prospect of a December rate cut looking 50/50, now is still the time for investors to buy quality, high-yield dividend stocks, as the stock market remains very overbought and volatility could continue to spike. Having more passive income can help cover rising costs, such as mortgages, insurance, taxes, and other expenses, making it easier for investors to save for future needs as they prepare for retirement."

"Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past 50 years (1973 to 2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%)."

Dividend stocks, especially high-yield names, deliver substantial income and can materially boost total return, which includes interest, capital gains, dividends, and distributions. With a roughly 50/50 chance of a December rate cut and an overbought market, buying quality, high-yield dividend stocks remains attractive despite potential volatility. Recurring passive income from dependable dividends can help cover rising expenses like mortgages, insurance, and taxes, easing retirement savings. Five of the highest-yielding S&P 500 stocks provide dependable yields from blue-chip companies rated Buy by major firms. Historical data show dividends contributed about 32% of S&P 500 total return, and dividend payers averaged 9.18% annualized versus 3.95% for non-payers.

Read at 24/7 Wall St.