The market appears fixated on the Federal Reserve meeting that begins Wednesday, and the main question is whether the Fed will raise its federal funds rate target for the first time in nearly a decade.
An increased short-term rate is expected to send interest rates higher across the spectrum. That, in turn, could lessen the attractiveness of high-dividend stocks. After all, when higher yields are easier to find—in ultra-safe government notes or in risky junk bonds—holding stocks for their dividends becomes a less attractive prospect.
Within that group of high-dividend stocks, the ones that could potentially get hit the most are the richly valued ones, as there's a greater chance that they have been overbought due to their yields. More generally, stocks with high valuations are seen as having less "cushion" to the downside should macroeconomic factors turn against them, since expectations that prospects will improve seem to be embedded into the shares.
The most common measure of valuation is the forward price-to-earnings multiple, which compares a stock's price to the earnings analysts expect over the next year. And within the S&P 500, eight stocks have dividend yields of more than 5 percent, forward price-to-earnings valuations above 30, and are not the subject of rampant acquisition speculation (as is Williams Companies, which would otherwise qualify).