At present, the highest dividend yields in the S & P 500 are dominated by energy stocks, as more and more oil and gas producers adopt variable dividends linked to profits at a time of high energy prices.

Paying variable dividends on the basis of basic dividends shows that energy companies are making huge profits from high energy prices. If oil prices fall, variable dividends may be reduced or even cancelled, but for now, a large number of variable dividends have brought generous total dividends to energy stock investors.

As of last Friday (August 19)$Pioneer Natural Resources (PXD.US)$、$Diamondback Energy (FANG.US)$和$Devon Energy (DVN.US)$The dividend yield is above 9%. Among them, Pioneer is far ahead of other S & P 500 stocks and large natural gas producers with a dividend yield of 14.1%.$Coterra Energy (CTRA.US)$The dividend yield is 8.6%.

The top 10 stocks with the highest dividend yields in the S & P 500 also include:$Lumen Technologies (LUMN.US)$、$Altria (MO.US)$、$Vornado Realty Trust (VNO.US)$、$Simon Property (SPG.US)$、$AT&T (T.US)$和$Kinder Morgan (KMI.US)$。

In the energy industry, Pioneer and Devon Energy were the first to return more cash to shareholders through regular and variable dividends. It turns out that this approach has been welcomed by investors, who are happy to see higher dividend yields and financial discipline accompanied by high dividend yields.

Pioneer, whose shares recently traded around $242, recently raised its basic dividend by 40% to $4.40 a share. Pioneer has a total quarterly dividend of $8.57 per share, including a large number of variable dividends, and the company uses up to 75% of its free cash flow to pay out variable dividends after raising the base dividend. Aaron Jayaram, an analyst at JPMorgan Chase & Co, called Vanguard "a leader in the industry in terms of cash returns".

However, the total amount of dividends paid by Vanguard and other energy companies paying variable dividends is likely to decrease as energy prices fall.

Devon McDermott, an analyst at Morgan Stanley, wrote in a recent report on Devon Energy: "the debate over variable dividends and buybacks is a hot topic for investors and they have not yet reached a clear consensus on which is better, but everyone agrees that continuous cash returns to shareholders is a good thing. "

According to McDermott, assuming that the price of West Texas Intermediate is $90 (roughly in line with current prices), Devon's total yield (dividend plus repo) in 2023 is about 9%.

Lumen, a telecom service provider, recently traded at about $11 with a dividend yield of 9 per cent. The company's cash flow per share is expected to be about $2 this year, which can easily cover a dividend of $1 a share.

Altria Group Inc, a Marlboro cigarette maker, recently traded at about $45 with a dividend yield of 8 per cent. The company's shares have fallen from a high of $57 in April on concerns about stricter federal regulations, including a possible sharp reduction in nicotine in cigarettes.

In the past, investors often said to buy Altria Group Inc when regulatory concerns surfaced, because the worst had not yet happened.

A key risk facing Altria Group Inc is the continued decline in cigarette consumption in the United States. Altria Group Inc has offset the impact of the decline in cigarette consumption by raising prices.。Altria Group Inc has long attached great importance to dividend payout, with the goal of raising the dividend payout ratio to 80 per cent. Altria Group Inc often raises his quarterly dividend in the summer, and analysts expect the company to increase its dividend by about 5% to about 94 cents a share later this month, according to Bloomberg.

Simon Property Group, the largest shopping mall owner in the US, continues to raise its quarterly dividend, reaching $1.75 a share in early August, up 16.7 per cent from a year earlier.

Simon's recent share price is around $110, with a dividend yield of 6.3 per cent. The company's shares are down 36% from their November peak as investors worry about weak consumer spending and a possible recession. However, the high-end shopping malls run by Simon have proved resilient, with operating cash flow per share changing little in the second quarter from a year earlier, close to $3 a share.

Vornado Realty Trust, the owner of Manhattan office buildings, is one of the worst-performing large real estate investment trusts since the outbreak, mainly affected by home-office trends. New York has been one of the weakest cities in the office market over the past two years.

The company's recent share price is about $29, less than half its pre-epidemic level. Because of the attractive portfolio of Manhattan office buildings and other developments centered around Penn Station, the company could be a target for activist investors. Vornado's dividend yield is more than 6 per cent.

Earlier this year, AT&T Inc cut the dividend of Warner Media and Discovery Media (Discovery Inc.) Officially completed the merger into Warner Bros. Discovery (Warner Bros). The company has a dividend yield of 6% and a share price of about $18.

John John Stankey, chief executive of AT&T Inc, said on a recent earnings call: "our aim is to ensure that substantial and competitive dividends are paid to existing shareholders. But he did not promise to maintain this policy for a long time. Stankie pointed out that AT&T Inc's top priority is to improve the balance sheet and reduce financial leverage.

Kinder Morgan, one of America's leading natural gas carriers, raised its dividend by 3% earlier this year. Kinder Morgan's recent share price is about $19, the dividend yield is about 6%, and the company has enough cash flow to pay the dividend.