Companies have been increasing their dividends as of recent.   With earnings improving and prospects for growth optimistic, corporations are feeling generous enough to offer incentives to purchase their stock.   Many stocks are still revealing valuations that are below where they should be under ideal conditions, and a quarterly payout by way of a dividend is an effective way to offer quick value to these beaten down investments.

How much can you expect to yield through dividend paying stocks?
The average dividend yield of all of the stocks on the S&P 500 at current levels is 1.72%, producing an average annual payout of 73 cents a share.   There are only 124 stocks within this index that do not provide these payouts.   Of the dividend paying equities, 52 have payouts topping 4%, largely consisting of mature companies that are beyond their growth phase in the business cycle.

What stocks have the greatest yield at current prices?
Following is the list of stocks in the S&P 500 that are currently yielding the highest return as a result of dividend payouts:

1. Windstream Corporation (WIN) – Dividend Payout (Yield): $1.00 (9.2%) – Average Analyst Price Target: $11.92
2. CENTURYTEL INC (CTL) – Dividend Payout (Yield): $2.90 (8.45%) – Average Analyst Price Target: $36.2
3. AT&T INC. (T) – Dividend Payout (Yield): $1.68 (6.52%) – Average Analyst Price Target: $29.72
4. ALTRIA GROUP INC (MO) – Dividend Payout (Yield): $1.4 (6.46%) – Average Analyst Price Target: $23.42
5. HEALTH CARE REIT (HCN) – Dividend Payout (Yield): $2.72 (6.35%) – Average Analyst Price Target: $46.25
6. PITNEY BOWES INC (PBI) – Dividend Payout (Yield): $1.46 (6.09%) – Average Analyst Price Target: $25.75
7. CENTERPOINT ENERGY (CNP) – Dividend Payout (Yield): $0.78 (5.42%) – Average Analyst Price Target: $16.3
8. R.R. Donnelley & Sons Company (RRD) – Dividend Payout (Yield): $1.04 (5.14%) – Average Analyst Price Target: $29
9. AMER ELECTRIC POW CO (AEP) – Dividend Payout (Yield): $1.68 (5%) – Average Analyst Price Target: $38.72
10. LORILLARD, INC (LO) – Dividend Payout (Yield): $4.00 (5%) – Average Analyst Price Target: $87.38
11. PHILIP MORRIS INTL (PM) – Dividend Payout (Yield): $2.32 (4.88%) – Average Analyst Price Target: $56.89
12. Microchip Technology Incorporat (MCHP) – Dividend Payout (Yield): $1.37 (4.76%) – Average Analyst Price Target: $32.08
13. MERCK CO INC (MRK) – Dividend Payout (Yield): $1.52 (4.54%) – Average Analyst Price Target: $43.13
14. SPECTRA ENERGY (SE) – Dividend Payout (Yield): $1.00 (4.43%) – Average Analyst Price Target: $24.1
15. PFIZER INC (PFE) – Dividend Payout (Yield): $0.72 (4.34%) – Average Analyst Price Target: $22.38

Generally, many of the stocks mentioned above have good prospects for growth.   Analysts, by large, are cautious about market prices in the near term; some expecting a correction to continue, or yet to come, and many are taking the approach of keeping money on the sidelines that would allow investments at market lows.   The dividend stocks mentioned above will provide investors with the payout incomes needed to generate cash flows, while being cushioned in cases of market volatility due to the dividend yield propping up the stock price to a certain extent.

Be sure to do your homework before you buy to assure that the payout is sustainable and the future growth/sustainability is in-line.

Disclaimer: Comments and opinions offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.