The Best Telecom Dividends on the S&P 500

At the end of every month Bloomberg releases a list of indicated dividend yield rankings for the S&P 500 (SPY) sorted by industry. It lists the yield and payout ratio for each stock within the industry, as well as the industry average. This month, like most months, the telecom industry carried the highest average yield at 7.02%. Utilities were second at 4.37% and actually offer a safer play than telecoms due to their stability and monopoly like status.Anyway, what’s disconcerting about the telecom industry is the high payout ratios. The industry average is 171.2%. This means that these companies, as a whole, are paying out $1.70 in dividends for every $1.00 of earnings. Many investors would argue that several of them have a long standing history of stable payouts so there is not much to worry about. Others would fret, and rightfully so. These stocks can be extremely volatile... Read more