If you’re considering buying dividend stocks, you’re not the only one. The S&P 500 has seen its biggest recovery since the tariff collapse on Liberation Day, yet various signs indicate that the economy might be facing challenges.
The labor market is stalling, consumer confidence is low, and the housing market is quite stagnant. Major retailers like Walmart and Target have raised alarms about an “affordability crisis.”
When looking at this situation, there are some reasons to lean towards dividend stocks rather than non-dividend ones. Generally, dividend stocks can yield profits even without price increases and they tend to show less volatility. While they may not always match the potential gains of some growth stocks, they generally hold up better in bear markets.
If you’re searching for high-dividend stocks, the S&P 500 is a solid starting point. There are a few companies here that stand out for offering high dividends.
LyondellBasell (NYSE:LYB) is leading the pack as the top dividend payer in the S&P 500, though this isn’t because of increased dividends—it’s a result of a sluggish stock price. The shares have dropped 40% this year due to rising input costs, weak demand for products like polypropylene, and growing competition, particularly in Asia. That said, there’s still some optimism about capacity adjustments.
Nonetheless, LyondellBasell did exceed expectations in its Q3 earnings, albeit with figures that were significantly lower than the previous year. Revenue declined by 10% to $7.72 billion, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) showed a loss of $835 million, down from $1.17 billion last year.
The outlook for Q4 isn’t great, but the company has enough cash to sustain its dividend, which currently yields 12%. However, if the downturn persists, the dividend may be at risk.
Real estate investment trusts (REITs) often provide dividends, so it’s no surprise to see Alexandria Real Estate Equities (NYSE:ARE) on this list. They’re involved in creating a significant life sciences campus ecosystem across various markets.
However, similar to LyondellBasell, Alexandria’s stock has tumbled this year, down 48%. The company deviated from its guidance and issued a weak forecast for 2026, alongside some asset write-downs and dealing with oversupply issues in the life sciences sector, which has led to lower occupancy rates.
In Q3, revenue dipped 1.5% to $751.9 million, and the adjusted funds from operations (FFO) decreased from $2.37 to $2.22 this quarter. Despite a historical trend of increasing dividends, the current operational challenges could hinder further dividend growth. The board is reportedly reconsidering their strategy for 2026, hinting that they may cut the dividend, which makes Alexandria Real Estate a less attractive investment right now.
Conagra Brands (NYSE:CAG), known for products like Duncan Hines and Slim Jim, has also struggled this year with a 36% drop in share price. Issues like declining sales and profit margins, along with inflation, have put pressure on their stocks.
In its most recent earnings report, organic sales were down by 0.6%, and the adjusted operating margin decreased by 244 basis points to 11.8%. Adjusted earnings per share (EPS) dropped 26.4% to $0.39.
The company anticipates adjusted EPS between $1.70 and $1.85 for fiscal 2026. Given that they currently pay a $1.40 dividend, it seems sustainable and offers a nearly 8% yield for those looking for income. But investors might want to keep their expectations in check, given that Conagra’s performance has been lackluster for a while now.
Before deciding to invest in LyondellBasell Industries, remember that our analysts have pointed out other stocks with potentially better short-term returns, and LyondellBasell isn’t among the recommended ones. Some of these stocks have shown remarkable growth in recent years.
