Credit Suisse (NYSE:CS) recently released a list of 20 stocks that provide greater dividend payments than bonds. The group averages a dividend yield of 4.2%, while capital gains average about 13%.
Analyst Michael Kassab used four key metrics to create the dividend list:
Dividend yield above 2.75%
Market cap of $15 billion or more
S&P credit rating of BBB or higher
Three-year beta vs. the S&P 500 less than 0.85
Only 40 companies in the S&P 500 (NYSEARCA:SPY) made the cut, none being from the financial sector (NYSEARCA:XLF). Credit Suisse reduced the list based on various weights. The companies listed below are the final 20.
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Tobacco company Altria Group (NYSE:MO) was the top pick with a dividend yield of 6.0%, and a YTD return of 13%.
Although shares are down 2% YTD, AT&T (NYSE:T) was number two since it pays a hefty dividend of 5.9%. Competitor Verizon (NYSE:VZ) is number three on list as it pays a dividend of 5.4%. Shares of Verizon are up 2.6% YTD.
Pharmaceutical giant Eli Lilly (NYSE:LLY) is fourth on the list with a dividend yield of 5.3%. Shares have gained 5.45% YTD.
Duke Energy (NYSE:DUK) is an electric utility company that pays a 4.9% dividend. Shares are up more than 13% YTD. Progress Energy (NYSE:PGN) is another electric utility play right behind Duke that pays a 4.8% dividend. Shares of Progress Energy are up nearly 21% YTD.
Number seven on the list is Philip Morris International (NYSE:PM). The company pays a dividend yield of 4.4%, and shares have gained almost 23% YTD.
Merck & Co. (NYSE:MRK) fills the eighth position by also paying a 4.4% dividend. However, shares are down nearly 3% for the year.
The Southern Company (NYSE:SO) ranks number nine on the list with a dividend yield of 4.4%. Shares have gained about 13% YTD.
Another pharmaceutical giant fills the ten spot. Bristol-Myers Squibb (NYSE:BMY) shares have jumped 16% this year, and currently pay a dividend of 4.2%.
The bottom ten that round out the list include: Pfizer (NYSE:PFE), Consolidated Edison Inc. (NYSE:ED), Kimberly-Clark (NYSE:KMB), Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), Procter & Gamble (NYSE:PG), Pepsi Co. (NYSE:PEP), General Mills (NYSE:GIS), McDonald’s (NYSE:MCD), and Coca-Cola (NYSE:KO).
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