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Defensive investors like high dividend yielding stocks and consider them as viable options in especially inflationary environments. We expect high dividend stocks to outperform the 10-year Treasuries over the next 10 years.

In addition, defensive investors may also seek sustainable dividend payments from each high dividend yielding stock. Since high dividend yielding companies with lower dividend payout ratios are more likely to continue paying high dividends in the future, we believe conservative investors like to pick such companies when seeking sustainability and inflation protection.

Below, we compiled a list of large cap U.S. stocks with low dividend payout ratios and high current dividend yields. The market data are sourced from Fidelity. All companies in this list have market capitalizations above $10 billion, 12-month dividend yields of at least 4%, EPS growth over the last five years of at least 4%, and EPS/dividend ratio of at least 1.75.

Company Name

Symbol

Dividend Yield (%)

Return since June

AT&T INC

T

6.1

-9.20%

ASTRAZENECA PLC

AZN

5.9

-6.75%

ELI LILLY AND CO

LLY

5.3

-0.16%

ENTERGY CORP.

ETR

5.2

-4.99%

EXELON CORP

EXC

4.9

1.16%

PETROBRAS

PBR

4.4

-16.83%

ROYAL BANK OF CANADA

RY

4.4

-13.69%

PRUDENTIAL PLC

PUK

4.3

-20.14%

INTEL CORP

INTC

4.2

-8.52%

NOVARTIS AG

NVS

4.1

-6.66%

PUBLIC SERVICE ENTERPRISE GR

PEG

4.1

2.88%

PETROCHINA CO LTD

PTR

4.1

-11.99%

LOCKHEED MARTIN CORP

LMT

4.1

-9.00%

RAYTHEON CO.

RTN

4.1

-15.34%

NEXTERA ENERGY INC

NEE

4.0

-3.32%

Average

-8.17%

Since the end of June, the 15 stocks in our list have an average return of -8.17% versus -8.85% for SPY. Eight of the 15 stocks outperformed the market, and two of them – EXC, PEG – have positive returns in the same period.

The top 10 highest dividend yielding large-cap U.S. stocks with low dividend payout ratios are as follows:

1. AT & T (NYSE:T): AT & T is a large telecommunications company providing telephone, internet and TV services. T has a 6.1% dividend yield and returned -9.20% since the end of June. The stock has a market cap of $165.81B and P/E ratio of 8.47. Phill Gross and Robert Atchinson hold the largest T position.

2. AstraZeneca (NYSE:AZN): AstraZeneca is a global biopharmaceutical company. It discovers, develops and commercializes prescription medicines. AZN has a 5.9% dividend yield and returned -6.75% since the end of June. It has a market cap of $61.81B and P/E ratio of 8.92. Jim Simons holds the biggest AZN position (see billionaire Simons’ favorite stocks here).

3. Eli Lilly and Co (NYSE:LLY): Eli Lilly and Company discovers, develops, manufactures and sells products in one business segment, pharmaceutical products. LLY has a 5.3% dividend yield and returned -0.16% since the end of June. It has a market cap of $42.88B and P/E ratio of 8.77. Jim Simons holds the biggest LLY position.

4. Entergy Corp (NYSE:ETR): Entergy is an integrated energy company engaged primarily in electric power production and retail electric distribution operations. ETR has a 5.2% dividend yield and returned -4.99% since the end of June. It has a market cap of $11.28B and P/E ratio of 9.08. Jean-Marie Eveillard holds the biggest ETR position among 300+ funds we are tracking.

5. Exelon Corp (NYSE:EXC): Exelon is a provider of energy services and it is the largest nuclear operator in the United States. EXC has a 4.9% dividend yield and returned 1.16% since the end of June. It has a market cap of $28.46B and P/E ratio of 10.73. Steven Cohen holds the biggest EXC position (see billionaire Cohen’s favorite stocks here).

6. Petrobras (NYSE:PBR): Petrobras is a Brazilian integrated oil and gas company. It operates in five segments: exploration and production; refining, commercialization and transport of oil and natural gas; petrochemicals; distribution of derivatives, electrical energy, bio fuels and other renewable energy sources. PBR has a 4.4% dividend yield and returned -16.83% since the end of June. It has a market cap of $180.21B and P/E ratio of 7.02. Sandy Nairn holds the biggest PBR position.

7. Royal Bank of Canada (NYSE:RY): RBC is a diversified financial services company. RBC provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. RY has a 4.4% dividend yield and returned -13.69% since the end of June. It has a market cap of $70.77B and P/E ratio of 13.49. Daniel Bubis holds the biggest RY position.

8. Prudential Plc (NYSE:PUK): Prudential is an international financial services group. PUK has a 4.3% dividend yield and returned -20.14% since the end of June. It has a market cap of $23.71B and P/E ratio of 7.99. Ken Fisher holds the biggest PUK position (see billionaire Fisher’s favorite stocks here).

9. Intel Corp (NASDAQ:INTC): Intel Corporation is a semiconductor chip maker company. The Company develops advanced integrated digital technology products, primarily integrated circuits, for industries, such as computing and communications. INTC has a 4.2% dividend yield and returned -8.52% since the end of June. It has a market cap of $104.24B and P/E ratio of 9.09. Lansdowne Partners hold the largest INTC position.

10. Novartis AG (NYSE:NVS): Novartis provides healthcare solutions. Its portfolio includes medicines, preventive vaccines and diagnostic tools, generic pharmaceuticals and consumer health products. NVS has a 4.1% dividend yield and returned -6.66% since the end of June. It has a market cap of $136.01B and P/E ratio of 13.21. Jim Simons holds the biggest NVS position.

Source: 15 High Dividend Stocks With Sustainable Payments