Top Dividend Stocks By Sector

by: Industrials Trader

Dividend and income investors are always looking for the next addition to their portfolio. Below, I screen stocks for the highest dividend yields in each respective sector. This is meant to be a starting point for those looking to add dividend stocks to their portfolio. This is not an examination of the fundamentals but, I believe, a helpful way to dice data in order to home in on which stocks you should research.

For usefulness, I limited this search using two criteria; first, the minimum market cap is set at $10 billion and, second, the dividend yield minimum is set at 5%.

Basic Materials

Southern Copper Corporation (NYSE:SCCO) and Vale SA (NYSE:VALE) are two of the highest dividend issuers in the basic materials sector with 9.71% and 6.09% respectively. Reinvestment is key to this sector so not many stocks meet our criteria.

Capital Goods

Within capital goods, Lockheed Martin (NYSE:LMT) leads the pack with a 5.01% dividend yield. As with basic materials, the capital goods sector is not a high dividend issuer for the reason that reinvestment of capital can be a competitive advantage in-and-of itself in this space.

Consumer Non-cyclicals

Of consumer non-cyclical stocks, Altria Group (NYSE:MO), Lorillard (NYSE:LO), and Reynolds American (NYSE:RAI) all stand as the highest with dividend yields at 5.26%, 5.10%, and 5.48% respectively. Each company has woes of it's own but of these three, Altria may be a promising one.


The energy sector is stock full of high dividend issuers. Among the highest is Seadrill (NYSE:SDRL) with a 9.20% yield. Others that meet our criteria are BP (NYSE:BP), Ecopetrol (NYSE:EC), Eni (NYSE:E), Petroleobras (NYSE:PBR), and TOTAL SA (NYSE:TOT) at 5.26%, 6.88%, 5.80%, 5.32%, 5.13%, and 5.96% respectively.


In the financials sector, we see two leading the pack: Annaly Capital Management (NYSE:NLY) at 13.84% and Banco Santander (NYSE:SAN) at 10.89%. Also meeting our criteria are Banco Bibao Vizcaya Argentaria (NYSE:BBVA), Sun Life Financial (NYSE:SLF), and Westpac Banking Corporation (NYSE:WBK) at 6.22%, 5.31%, and 6.29% respectively. Of course the financials sector is not a place you want to jump into blindly. Much due diligence and research is required here.


AstraZeneca and GlaxoSmithKline come in with the highest dividend yields of 5.91% and 5.35% respectively. For additional thoughts on this sector, please reference my previous article.


The services sector, like the energy sector, offers many companies that meet our yield and market cap criteria-eleven in total. Of these, France Telecom (FTE) and American Capital Agency Corporation (NASDAQ:AGNC) far outpace the group with dividend yields of 16.38% and 16.07% respectively. All other dividend yields are under 10%. Among these are names such as AT&T (NYSE:T), CenturyLink (NYSE:CTL), Vodafone Group (NASDAQ:VOD), and BCE (NYSE:BCE).


Of technology companies, only Nokia (NYSE:NOK) meets our criteria with a 6.56% dividend yield. Your average investor is well-aware of Nokia's struggles over the past few years so this should be a case-in-point that further due diligence is required before investing.


Utilities appear to be just like the energy and financial sectors with eleven companies meeting our criteria. By far, the utilities company with the highest dividend yield is Companhia Energetica (NYSE:CIG) with a 14.07% yield. Other major players, however, include Kinder Morgan Energy Partners LP (NYSE:KMP), Exelon Corporation (NYSE:EXC), and National Grid (NYSE:NGG).


Sectors not found here are conglomerates, transportation, and consumer cyclicals where there are no stocks that meet our $10 billion market cap and 5% dividend yield criteria.


Of course, companies may trim or slash dividends at any point in time. Additionally, stock prices may decline significantly-leaving you with the same dividend yield but a lower dividend payout. Finally, high dividend yield may detract from reinvestment opportunities which yield a higher ROI for shareholders. However, as previously stated, the intention here is to make stock screening easier for the dividend and income investor according to which sector the investor may want greater exposure to. There are some notable macroeconomic headwinds for many of the sectors mentioned above such as the financial and healthcare stocks. Screening, however, must begin somewhere and I believe this is a good base from which to begin your research.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.