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In our recent study we have shown that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. The dividend stocks beat the overall market by an average of 1.36% per year during this period.

We compiled a list of 28 large cap companies with tremendous market capitalization that also pay fat dividend checks regularly. All companies in this list have a market capitalization above $10 billion and dividend yield of at least 3.5%. These 28 stocks returned 29.9% (including dividends) during the past 12 months, beating government bonds by a large margin.

Stock

Yield
(%)

Price (USD)

Dividend (USD)

2008

2009

2010

Altria Group, Inc. (NYSE:MO)

5.4%

27.74

1.68

1.32

1.46

American Electric Power Company (NYSE:AEP)

4.7%

38.55

1.64

1.64

1.7

AT&T Inc. (NYSE:T)

5.4%

31.32

1.6

1.64

1.68

Bank of Montreal (NYSE:BMO)

4.4%

63.9

2.629

2.434

2.707

BCE Inc. (NYSE:BCE)

4.6%

39.91

0.73

1.54

1.7325

Bristol Myers Squibb Co. (NYSE:BMY)

4.6%

28.37

1.24

1.24

1.28

Canadian Imperial Bank of Comm (NYSE:CM)

3.9%

86.74

3.304

3.112

3.363

CenturyLink, Inc. (NYSE:CTL)

6.7%

43.2

2.76

2.8

2.9

Consolidated Edison, Inc. (NYSE:ED)

4.4%

53.91

2.34

2.36

2.38

Dominion Resources, Inc. (NYSE:D)

3.9%

48.28

1.58

1.75

1.83

Duke Energy Corporation (NYSE:DUK)

5.2%

19.01

0.9

0.94

0.97

Eli Lilly & Co. (NYSE:LLY)

5.1%

38.44

1.88

1.96

1.96

Entergy Corporation (NYSE:ETR)

4.8%

69.04

3

3

3.24

Exelon Corporation (NYSE:EXC)

5.0%

42.26

2.025

2.1

2.1

FirstEnergy Corp. (NYSE:FE)

4.9%

44.76

2.2

2.2

2.2

Kimberly Clark Corp (NYSE:KMB)

3.9%

68.18

2.32

2.4

2.64

Lorillard Inc. (NYSE:LO)

3.9%

116.37

1.84

3.84

4.25

PG&E Corporation (NYSE:PCG)

4.1%

44.78

1.56

1.68

1.82

PPL Corporation (NYSE:PPL)

5.0%

28.28

1.34

1.38

1.4

Progress Energy, Inc. (NYSE:PGN)

5.1%

48.44

2.46

2.48

2.48

Public Service Enterprise Group Inc. (NYSE:PEG)

4.0%

34.11

1.292

1.332

1.372

Reynolds American, Inc. (NYSE:RAI)

4.9%

39.28

1.7

1.7

1.8

Southern Copper Corporation (NYSE:SCCO)

5.5%

35.05

1.94347

0.442

1.68

Sun Life Financial Inc. (NYSE:SLF)

4.5%

31.39

1.345

1.269

1.389

The Southern Company (NYSE:SO)

4.5%

40.47

1.663

1.734

1.803

TransCanada Corporation (NYSE:TRP)

3.7%

43.87

1.353

1.347

1.564

Williams Partners LP (NYSE:WPZ)

5.3%

52.37

2.435

2.54

2.654

Xcel Energy Inc. (NYSE:XEL)

4.0%

25.26

0.944

0.973

1.004

1. Altria Group, Inc. provides the manufacture and sale of cigarettes, other tobacco products and wine worldwide. MO recently traded at $27.74 and has a 5.4% dividend yield. MO gained 40.7% during the past 12 months. The stock has a market cap of $58.1 billion and P/E ratio of 14.4.

2. American Electric Power Company, Inc. provides generation, transmission, and distribution of electric power. AEP recently traded at $38.55 and has a 4.7% dividend yield. AEP gained 28.7% during the past 12 months. The stock has a market cap of $18.6 billion and P/E ratio of 15.2.

3. AT&T Inc. is one of the leading telecommunication companies worldwide. T recently traded at $31.32 and has a 5.4% dividend yield. T gained 33.8% during the past 12 months. The stock has a market cap of $185.5 billion and P/E ratio of 8.9. Bruce Berkowitz's Fairholme reduced his T invesment to $20 million during first quarter of 2011. He had $276 million invested in T shares at the end of December.

4. Bank of Montreal provides a range of retail banking, wealth management, and investment banking products and solutions. BMO recently traded at $63.9 and has a 4.4% dividend yield. BMO gained 17.9% during the past 12 months. The stock has a market cap of $36.3 billion and P/E ratio of 12.6. BMO is one of the 35 Growing Dividend Stocks With Low PE Ratios.

5. BCE Inc. is one of the leading communication companies operating primarily in Canada. BCE recently traded at $39.91 and has a 4.6% dividend yield. BCE gained 44% during the past 12 months. The stock has a market cap of $30.1 billion and P/E ratio of 16.59.

6. Bristol Myers Squibb Co. is a global biopharmaceutical company. BMY recently traded at $28.37 and has a 4.6% dividend yield. BMY gained 29.8% during the past 12 months. The stock has a market cap of $48.4 billion and P/E ratio of 14.7.

7. Canadian Imperial Bank of Commerce provides financial products and services primarily in Canada. CM recently traded at $86.74 and has a 3.9% dividend yield. CM gained 29.8% during the past 12 months. The stock has a market cap of $34.2 billion and P/E ratio of 13.6.

8. CenturyLink, Inc. is an integrated communications company. CTL recently traded at $43.2 and has a 6.7% dividend yield. CTL gained 39.9% during the past 12 months. The stock has a market cap of $25.9 billion and P/E ratio of 14.51.

9. Consolidated Edison, Inc. provides electric, gas, and steam utility services. ED recently traded at $53.91 and has a 4.4% dividend yield. ED gained 30.6% during the past 12 months. The stock has a market cap of $15.8 billion and P/E ratio of 14.4.

10. Dominion Resources, Inc. produces and transports energy in the United States. D recently traded at $48.28 and has a 3.9% dividend yield. D gained 26.1% during the past 12 months. The stock has a market cap of $27.8 billion and P/E ratio of 9.1.

11. Duke Energy Corporation is an energy company. DUK recently traded at $19.01 and has a 5.2% dividend yield. DUK gained 25.3% during the past 12 months. The stock has a market cap of $25.31 billion and P/E ratio of 18.21.

12. Eli Lilly & Co. is one of the leading Drug Manufacturers operating worldwide. LLY recently traded at $38.44 and has a 5.1% dividend yield. LLY gained 22.4% during the past 12 months. The stock has a market cap of $42.8 billion and P/E ratio of 8.7.

13. Entergy Corporation is an integrated energy company. ETR recently traded at $69.04 and has a 4.8% dividend yield. ETR lost 3.2% during the past 12 months. The stock has a market cap of $12.3 billion and P/E ratio of 9.9.

14. Exelon Corporation, a utility services holding company, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity to residential, commercial, industrial, and wholesale customers in northern Illinois EXC recently traded at $42.26 and has a 5% dividend yield. EXC gained 12.7% during the past 12 months. The stock has a market cap of $28 billion and P/E ratio of 11.3.

15. FirstEnergy Corp. operates as a diversified energy company. FE recently traded at $44.76 and has a 4.9% dividend yield. FE gained 35.8% during the past 12 months. The stock has a market cap of $18.7 billion and P/E ratio of 20.7.

16. Kimberly Clark Corp. provides health care products worldwide. KMB recently traded at $68.18 and has a 3.9% dividend yield. KMB gained 15.4% during the past 12 months. The stock has a market cap of $26.8 billion and P/E ratio of 15.5.

17. Lorillard Inc. provides the manufacture and sale of cigarettes in the United States. LO recently traded at $116.37 and has a 3.9% dividend yield. LO gained 65.2% during the past 12 months. The stock has a market cap of $16.7 billion and P/E ratio of 16.6. Jim Simons’ Medallion Fund had $360 million invested in LO at the end of December. During the third quarter of 2010 Chase Coleman’s Tiger Global Management completely sold its LO shares.

18. PG&E Corporation is a public utility company that provides electricity and natural gas distribution primarily in northern and central California. PCG recently traded at $44.78 and has a 4.1% dividend yield. PCG gained 11.7% during the past 12 months. The stock has a market cap of $17.7 billion and P/E ratio of 16.9.

19. PPL Corporation generates and markets electricity in the United States and the United Kingdom. PPL recently traded at $28.28 and has a 5% dividend yield. PPL gained 19.5% during the past 12 months. The stock has a market cap of $16.3 billion and P/E ratio of 12.

20. Progress Energy, Inc., a utility holding company, provides electricity in North Carolina, South Carolina, and Florida. PGN recently traded at $48.44 and has a 5.1% dividend yield. PGN gained 33.3% during the past 12 months. The stock has a market cap of $14.3 billion and P/E ratio of 16.7.

21. Public Service Enterprise Group Inc. operates in the energy industry primarily in the northeastern and mid-Atlantic United States. PEG recently traded at $34.11 and has a 4% dividend yield. PEG gained 17.7% during the past 12 months. The stock has a market cap of $17.3 billion and P/E ratio of 10.9.

22. Reynolds American, Inc. provides cigarette and other tobacco products in the United States. RAI recently traded at $39.28 and has a 4.9% dividend yield. RAI gained 62% during the past 12 months. The stock has a market cap of $22.9 billion and P/E ratio of 16.6.

23. Southern Copper Corporation provides mining, smelting, and refining mineral properties in Peru, Mexico, and Chile. SCCO recently traded at $35.05 and has a 5.5% dividend yield. SCCO gained 32.2% during the past 12 months. The stock has a market cap of $29.8 billion and P/E ratio of 18.1.

24. Sun Life Financial Inc. is one of the leading international life insurance companies. SLF recently traded at $31.39 and has a 4.5% dividend yield. SLF gained 19.5% during the past 12 months. The stock has a market cap of $18.1 billion and P/E ratio of 11.

25. The Southern Company provides electric service in the southeastern United States. SO recently traded at $40.47 and has a 4.5% dividend yield. SO gained 26.4% during the past 12 months. The stock has a market cap of $34.4 billion and P/E ratio of 18.

26. TransCanada Corporation operates as an energy infrastructure company in North America. TRP recently traded at $43.87 and has a 3.7% dividend yield. TRP gained 38.5% during the past 12 months. The stock has a market cap of $30.7 billion and P/E ratio of 22.1.

27. Williams Partners LP is an integrated natural gas company. WPZ recently traded at $52.37 and has a 5.3% dividend yield. WPZ gained 52.5% during the past 12 months. The stock has a market cap of $15.2 billion and P/E ratio of 18.31. In his first quarter investor letter, Third Point's Dan Loeb mentioned WPZ. He believed that the shares remain significantly undervalued and has added to the position.

28. Xcel Energy Inc. provides electricity in the United States. XEL recently traded at $25.26 and has a 4% dividend yield. XEL gained 27.8% during the past 12 months. The stock has a market cap of $12.2 billion and P/E ratio of 15.08.

Source: 28 Dividend Stocks for Strong Income