These elite dividend payers have yields that can compete with bonds

Published Mon, Mar 6 20232:40 PM EST

Hakyung Kim @https://www.linkedin.com/in/hakyungkim/@hakyungkim_

Bonds have become more attractive as Treasury yields approach their highest levels in a decade — but certain top dividend-paying stocks also provide competitive payoffs to investors. Bond yields have risen as investors become more anxious regarding red-hot inflation numbers and the Federal Reserve's rate hike path. Yields rise as prices fall. The benchmark 10-year Treasury note topped 4% last week before ticking below this threshold Monday morning. With rates surging, there are fewer stocks that can compete with bonds these days on a yield basis. CNBC used FactSet data to screen for the largest 1,500 stocks listed in the S & P with yields above 4% — better than the 10-year Treasury note. The yields on the stocks also appeared safe, with dividend-coverage ratios above 2, as well as a total debt-to-equity ratio less than 150%. These stocks have also outperformed the stock markets over the past 12 months with returns above -6.54%. Take a look at some of the stocks that can compete with bond yields, and where analysts expect them going forward. Eggs producer and distributor Cal-Maine Foods has the highest dividend yield of 9.5% on the list. Shares have gained about 4% in 2023. Warren Buffett's food and beverage group Kraft Heinz is another name on the list. Kraft Heinz offers investors a dividend yield of 4.1%, and the company has a debt-to-equity ratio of 42.7%. The company' s fourth-quarter earnings and sales beat Wall Street's expectations, but offered a more muted profit guidance for 2023 due to pressure from higher costs. Analysts are mixed on the stock, however, with 13 out of 22 of analysts covering it issuing it a hold rating, according to FactSet. Several energy names also made it on the elite dividends list, such as CONSOL Energy , Coterra Energy , Kinder Morgan and Devon Energy. CONSOL Energy has a dividend yield above 7%. Shares of the company have soared 67% in the past 12 months. Several financial groups were also featured, including Huntington Bancshares , Corporate Office Properties Trust and Provident Financial Services .