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In a previous study, we showed that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. Dividend stocks beat the overall market by an average of 1.36% per year in that period. In another article, we provided a list of S&P500 stocks with market cap over $60 billion and showed that high dividend mega-cap S&P500 stocks have performed better than both low dividend S&P500 stocks and the SPY.

Similarly, investors can check out high dividend yielding S&P500 stocks other than mega-caps. After the recent market sell-off, some of the large-cap S&P500 stocks become appealing to dividend investors as their dividend yields pass these investors' thresholds. As we are concerned about the Fed's loose monetary policy, we think investors should pick defensive stocks with high dividend yields in order to protect themselves against inflation and future declines in the market.

Below, we provide 11 large-cap S&P500 stocks with high dividend yields. All these stocks have a market capitalization between $30B and $60B, a dividend yield of at least 3%, and P/E ratio below 20. Since the beginning of this year, the average YTD return of these 11 S&P500 stocks was -3.84% vs. -6.76% for the SPY.

Altria Group Inc. (NYSE:MO), formerly known as Philip Morris Companies Inc., is the parent company of five tobacco corporations. MO has a high dividend yield of 6.09% and returned 4.39% since the beginning of this year. The stock has a market cap of $51.70B and P/E ratio of 15.22. Tom Russo had more than $150 million in MO at the end of March 2011.

Eli Lilly & Co. (NYSE:LLY) is a large pharmaceutical company operating worldwide. LLY has a 5.55% dividend yield and returned 4.93% since the beginning of this year. The stock has a market cap of $40.87B and P/E ratio of 8.31. Jim Simons holds more than $200M of LLY. (See Simons’ favorite stocks.)

Southern Company (NYSE:SO) is a U.S. electricity utilities company. SO has a 4.80% dividend yield and returned 6.89% since the beginning of this year. The stock has a market cap of $33.80B and P/E ratio of 16.84. Phil Gross’ Adage Capital and Clint Carlson’s Carlson Capital are prominent SO investors.

Bristol-Myers Squibb Co. (NYSE:BMY) is a global pharmaceutical company. BMY has a 4.75% dividend yield and returned 8.89% since the beginning of this year. The stock has a market cap of $45.13B and P/E ratio of 14.48. Both Samuel Isaly and Simons hold more than $100 million of BMY.

The Dow Chemical Co. (NYSE:DOW) is a global corporation providing plastics, chemicals and agricultural products worldwide. DOW has a 3.56% dividend yield but lost 12.86% since the beginning of this year. The stock has a market cap of $34.75B and P/E ratio of 13.37. Joshua Berkowitz, Mark Kingdon and Ken Griffin are among DOW investors.

DuPont (NYSE:DD) is an American company that provides a wide range of science-based products and related services worldwide. DD has a 3.49% dividend yield but lost -3.55% since the beginning of this year. The stock has a market cap of $43.79B and P/E ratio of 13.01. Simons is the most prominent DD investor, holding more than $40 million of the stock.

Kraft Foods Inc. (KFT) is an American food company providing snacks, confectionery, and quick meal products worldwide. KFT has a 3.40% dividend yield and gained 10.14% since the beginning of this year. The stock has a market cap of $59.94B and P/E ratio of 19.60. Warren Buffett had $3 billion invested in KFT shares (see Buffett’s other massive holdings here). Bill Ackman also holds a large KFT position.

The Home Depot Inc. (NYSE:HD) is a large home improvement specialty retailer. HD has a 3.33% dividend yield but lost 13.05% since the beginning of this year. The stock has a market cap of $47.85B and P/E ratio of 14.38. Ralph V. Whitworth's Relational Investors holds more than $400 million of HD. Jean-Marie Eveillard and Griffin are also among HD investors.

Emerson Electric Co. (NYSE:EMR) is a global conglomerate providing a wide range of engineering and technology products and related services. EMR has a 3.29% dividend yield but lost 18.52% since the beginning of this year. The stock has a market cap of $34.02B and P/E ratio of 15.18. Ken Fisher holds more than $250 million of EMR. (Check out Fisher’s favorite stocks).

Medtronic Inc. (NYSE:MDT) is a large medical technology company mainly providing device-based medical therapies worldwide. MDT has a 3.11% dividend yield but lost 14.39% since the beginning of this year. The stock has a market cap of $33.08B and P/E ratio of 10.90. John Paulson holds more than $350 nillion of MDT. Ric Dillon and Bill Miller are other prominent MDT investors.

Honeywell International Inc. (NYSE:HON) is a US conglomerate providing aerospace systems, diversified technology products and related services. HON has a 3.08% dividend yield but lost 15.07% since the beginning of this year. The stock has a market cap of $34.92B and P/E ratio of 13.86. Fisher had more than $300 million in HON at the end of March.

Source: 11 High Dividend Stocks for Dividend Lovers