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Some of the large-cap companies are paying very rich dividends. I have tried to find out if the five stocks which have the highest dividend yield among the stocks which are included in the S&P 500 index are at a bargain now.

S&P 500 index.

Description from Standard & Poor's:

Widely regarded as the best single gauge of the U.S. equities market, this world-renowned index includes 500 leading companies in leading industries of the U.S. economy. Although the S&P 500® focuses on the large cap segment of the market, with approximately 75% coverage of U.S. equities, it is also an ideal proxy for the total market. S&P 500 is part of a series of S&P U.S. indices that can be used as building blocks for portfolio construction.

In this article, I will give the corresponding fundamental parameters for these five companies and my own opinion about them. Nonetheless, these data and my opinion should only serve as a basis for further research. All the data for this article were taken from Yahoo Finance and finviz.com on January 10, before the market open.

The table and the chart below present the top five highest-dividend yielders, their forward annual dividend rate, the forward yield, the payout ratio and the dividend rate of growth for the past five years.

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Pitney Bowes Inc. (NYSE:PBI)

Pitney Bowes Inc. provides software, hardware, and services to enable physical and digital communications.

Pitney Bowes has a very low trailing P/E of 6.56 and even a lower forward P/E of 6.19, the price to sales ratio is also very low at 0.47. The forward annual dividend yield is very high at 12.63% and the annual rate of dividend growth over the past five years was at 2.6% and the payout ratio is at 82.9%.

PBI has a total cash per share of $2.30 and it is expected to post a profit of $1.99 a share in the current year and $1.92 in 2013, which should be enough to sustain dividend payments of $1.50. But the company also has a huge debt of $3.68 billion and it might decide to decrease the dividend rate in order to decrease its debt. The PBI stock is trading 32.95% below its 52-week high, and has 32% upside potential based on the consensus mean target price of $15.67.

Despite the huge debt, the compelling valuation metrics, the very rich dividend and the 32% upside potential based on the consensus mean target price of $15.67 make PBI stock quite attractive.

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Data: Yahoo Finance

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Chart: finviz.com

Windstream Corporation (NASDAQ:WIN)

Windstream Corporation provides communications and technology solutions in the United States.

Windstream has a trailing P/E of 42.61 and a forward P/E of 17.82, the price-to-sales ratio is quite low at 0.99. The forward annual dividend yield is very high at 10.20% and the payout ratio is very high at 435% and there has not been any dividend growth over the past five years.

WIN has a total cash per share of $0.20 and it is expected to post a profit of $0.49 a share in the current year and $0.55 in 2013. It is not clear if it will be enough to sustain such a high-dividend payment of $1.00.

The WIN stock is trading 13.52% above its 20-day simple moving average, 14.83% above its 50-day simple moving average and 5.10% above its 200-day simple moving average, which indicates short-term, mid-term and long-term uptrend.

Since it is not clear if the company will be able to sustain such a high dividend payment and the valuation metrics are not cheap, I cannot recommend the stock even though it is in an uptrend.

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Data: Yahoo Finance

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Chart: finviz.com

Frontier Communications Corporation (NASDAQ:FTR)

Frontier Communications Corporation provides communications services for residential and business customers in the United States.

Frontier Communications has a trailing P/E of 29.00 and a forward P/E of 17.40 and the price-to-sales ratio is very low at 0.86. The forward annual dividend yield is very high at 9.20% and the annual rate of dividend growth over the past five years was negative at -16.7% and the payout ratio is very high at 266.67%.

FTR has a total cash per share of $1.10 and it is expected to post a profit of $0.26 a share in the current year and $0.25 in 2013, which should be enough to sustain dividend payments of $0.40. But the company also has a huge debt of $8.85 billion and it might decide to decrease the dividend rate in order to decrease its debt. FTR stock is trading 13.78% below its 52-week high, and has 17.7% upside potential based on the consensus mean target price of $5.12.

Most analysts rate the FTR stock as a hold, and I think this rating is the most appropriate.

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Data: Yahoo Finance

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Chart: finviz.com

CenturyLink, Inc. (NYSE:CTL)

CenturyLink, Inc. operates as an integrated telecommunications company in the United States.

CenturyLink has a high trailing P/E of 37.93 and a forward P/E of 15.03, the price-to-sales ratio is at 1.35. The forward annual dividend yield is very high at 7.28% and the annual rate of dividend growth over the past five years was at 61.4% and the payout ratio is at 276.19%.

CTL has a total cash per share of $0.31 and it is expected to post a profit of $2.66 a share in the current year and $2.65 in 2013, which is hardly enough to sustain dividend payments of $2.90. The company also has a huge debt of 20.71 $billion and it might decide to decrease the dividend rate in order to decrease its debt.

The CTL stock is trading 1.24% above its 20-day simple moving average, 3.70% above its 50-day simple moving average and 3.78% above its 200-day simple moving average, which indicates short-term, mid-term and long-term uptrend. Analysts recommend the stock; among the 21 analysts covering the stock, eight rate it as a strong buy, eight rate it as a buy and five rate it as a hold.

The very rich dividend, the analysts' recommendation and the fact that the stock is in an uptrend are all factors that make CTL stock quite attractive.

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Data: Yahoo Finance

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Chart: finviz.com

Exelon Corporation (NYSE:EXC)

Exelon Corporation, a utility services holding company, engages in the energy generation and distribution business in the United States.

Exelon has a trailing P/E of 15.64 and a very low forward P/E of 11.51, the price-to-sales ratio is at 1.18. The forward annual dividend yield is very high at 7.18% and the annual rate of dividend growth over the past five years was at 3.6% and the payout ratio is at 112.3%.

EXC has a total cash per share of $1.99 and it is expected to post a profit of $2.85 a share in the current year and $2.54 in 2013, which should be enough to sustain dividend payments of $2.10. But the company also has a huge debt of $19.74 billion and it might decide to decrease the dividend rate in order to decrease its debt. EXC stock is trading 25.81% below its 52-week high, and has 16% upside potential based on the consensus mean target price of $33.88.

Despite the huge debt, the quite cheap valuation metrics, the very rich dividend and the 16% upside potential based on the consensus mean target price of $33.88 make EXC stock quite attractive.

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Data: Yahoo Finance

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Chart: finviz.com

Source: 5 S&P 500 Top-Dividend Yielders; Are They Bargain Stocks Now?