For information only. Do your own due diligence — this is a screener, not a recommendation.
The 10Y Treasury closed Friday May 23 at 4.41% per FRED data, which means any equity dividend yield below ~5% is now a negative real spread against the risk-free rate before tax. ICI data through April shows $87B net new into money market funds YTD — that’s the revealed preference. Against a 5.1% MMF rate per Crane Data, a 4% dividend yield needs 80+ bps of expected appreciation just to break even after tax. That’s the math forcing the screen threshold higher. This screener is built for a 6–18 month holding horizon, not a swing trade.
The Screen: 4%+ Yield, Payout Discipline, No Yield Traps
I started with the Russell 1000 universe paying a forward yield of 4.0% or higher per Yahoo Finance (May 23 close prints). Then narrowed on two filters that kill most of the noise: (1) trailing payout ratio under 85% of free cash flow per latest 10-Q filings, and (2) dividend per share that has been flat or growing every year for the last five fiscal years. The first filter eliminates the obvious yield traps — companies paying out 110% of FCF on borrowed money. The second filter screens out the “4% yield because the stock just dropped 40%” names where the next quarterly print is the cut.
Credit spreads signal what equities haven’t priced yet: safety. HY OAS sits at 318 bps per ICE BofA, well below the 480 bps panic level from October 2023. If high yield credit spreads were screaming, you’d see it in the dividend coverage data first — and right now, you don’t.
Below are seven names that passed both filters, ranked by what I think is the cleanest risk/reward — not by yield magnitude.
VZ — Verizon Communications, 6.4% Yield
Telecom integrated carrier, ~$180B market cap.
Why it qualifies: Forward yield 6.41% at the May 23 $41.85 close per Finnhub. Trailing FCF coverage of the dividend is 1.62x based on Q1 2026 10-Q ($4.8B FCF against $2.95B in declared dividends). Verizon has raised the dividend for 19 consecutive years per the company’s investor relations deck.
Key risk: Net debt of $145B per Q1 10-Q. Every 25 bps move in the 10Y refinancing curve costs roughly $360M annually once the debt rolls. The dividend isn’t at risk in 2026 but the equity multiple is capped while rates stay above 4%.
Entry consideration: The $40 level held three times in Q1 (Jan 18, Feb 12, March 7) per the daily chart — that’s the line where the dividend yield mathematically crosses 6.7% and gets defended by income funds. Buy zone $40–42; avoid chasing into earnings on July 23 pre-open.
MO — Altria Group, 7.9% Yield
Tobacco and nicotine products, ~$84B market cap.
Why it qualifies: 7.92% forward yield at $49.20 per Yahoo Finance. The board has raised the dividend 58 times in 54 years per the 2025 proxy. Payout ratio of 76% of adjusted EPS per the Q1 release — high, but stable. Combustible cigarette gross margin has held 68–71% for eight consecutive years per segment filings, even as volumes declined cumulatively 38% over the same period — that’s the pricing-power proof the bears have been waiting to break for a decade.
Key risk: Cigarette volumes declined 10.2% YoY in Q1 per the segment report. The thesis depends entirely on pricing power offsetting volume — which has worked for 30 years, but is one FDA menthol ruling away from breaking. NJOY (acquired 2023) is still a drag on op margin.
Entry consideration: Watch the $47.50 level — that’s the 200-day moving average and where the yield mechanically hits 8.2%.
PFE — Pfizer, 6.1% Yield
Large-cap pharma, ~$152B market cap.
Why it qualifies: 6.13% forward yield at $26.82. Pfizer has paid an uninterrupted dividend for 344 consecutive quarters per the company’s 2025 investor day deck. The Seagen acquisition oncology pipeline reaches three pivotal readouts in H2 2026 per the May 1 R&D update.
Key risk: The Eliquis loss-of-exclusivity arrives 2028. Consensus is already pricing the cliff, but if pipeline misses, the 4-year forward DPS coverage gets uncomfortable. Watch the Q3 2026 call (October 29 pre-open) for the first hard guide on 2027 capital return.
Entry consideration: The $26 level has been tested four times since November 2024 (Nov 7, Dec 9, Feb 14, April 28) and closed above it each time — the bid has been real, whatever its source. Below $25, the dividend yield crosses 6.5%. Above $30, the math no longer works for a fresh entry.
BMY — Bristol-Myers Squibb, 4.9% Yield
Diversified pharma, ~$98B market cap.
Why it qualifies: 4.91% yield at $49.30. Payout ratio of 58% of FCF per Q1 — the most conservative of any 4%+ pharma name in the screen. Dividend grown 16 consecutive years per the proxy.
Key risk: Revlimid generic erosion is a known $4B+ revenue hole through 2027. Management said on the Q1 call (April 24) that buybacks are paused until the Karuna integration closes — that’s a sentiment hit even though the dividend is untouched.
Entry consideration: The $47 May 12 low coincided with the 50-week moving average. The base case is range-bound $47–55 until the September data readout for Cobenfy in Alzheimer’s agitation.
KMI — Kinder Morgan, 5.4% Yield
Midstream energy infrastructure (pipelines), ~$48B market cap.
Why it qualifies: 5.43% yield at $21.10. KMI has guided $5.0B distributable cash flow for 2026 against $2.7B in dividends — DCF coverage of 1.85x, well above the midstream peer average of 1.6x per Wells Fargo’s May 12 sector note.
Key risk: 60% of EBITDA tied to natural gas throughput per the 10-K. If Henry Hub stays below $3.00/MMBtu through Q3 — currently $2.71 per EIA — producer activity slows and 2027 volume guides come down.
Entry consideration: $20.50 is the technical floor going back to August 2025. Forward catalysts: FERC ruling on the SNG capacity expansion expected June 18, and the Q2 call July 17 after close. Income investors typically add ahead of the ex-dividend date, July 31.
O — Realty Income, 5.7% Yield
Net-lease commercial REIT, ~$54B market cap.
Why it qualifies: 5.71% forward yield at $55.80, paid monthly. At the current $0.268/month DPS and Q1 AFFO of $1.04/share, the coverage cushion is $0.27/share per quarter — that’s the buffer before any streak narrative becomes relevant. AFFO payout ratio of 76% per Q1 supplemental — the operational definition of “covered” for a REIT.
Key risk: Pure-play rate sensitivity. Realty Income’s correlation to the 10Y over the trailing 12 months is -0.71 per FactSet — about as clean a duration trade as exists in the equity market. Every 50 bps rate cut historically adds ~8% to the multiple; every 50 bps hike does the reverse.
Entry consideration: CME FedWatch shows 41% probability of a September cut as of May 23 — that’s the asymmetric setup. Wait for any May payrolls beat on June 6 8:30 ET to push O back toward $53 before adding.
MMM — 3M, 5.0% Yield
Diversified industrial, ~$72B market cap.
Why it qualifies: Post-Solventum spin-off, the rebased dividend yields 5.04% at $131.20 and is now covered 2.1x by adjusted FCF per the Q1 report. The combined Public Water Supplier and Combat Arms settlement liabilities are reserved — the legal overhang priced in 2023–24 has largely cleared per Goldman’s May 14 sector update.
Key risk: Organic revenue declined 0.3% in Q1 per the press release. Dividend history here is a cost-restructuring artifact, not a demand signal — the margin expansion thesis requires 4+ more quarters of execution before the P&L normalizes. Investors treating the 5% yield as a free lunch on industrial earnings quality are reading the wrong line item.
Entry consideration: $128 was the gap-fill from the January earnings move. Q2 call July 25 pre-open is the next test of the cost-out trajectory.
3 Scenarios From Here (6-Month Horizon)
Bull: 10Y compresses to 3.85% on a September 25 bps cut + reduced QRA long-end issuance → cohort re-rates +12% (O to $62, MMM to $147, VZ to $46) on top of ~3% accrued dividend income, total return ~15% by November.
Base: 10Y range 4.20–4.55%, Fed delivers one 25 bps cut by December → cohort flat to +4% on price, +3% on dividends, total return ~7%. O and KMI lead; VZ and MMM lag.
Bear: Sticky inflation pushes 10Y to 4.85%+ and Fed pauses through year-end → cohort -8% to -12% on price (O to $49, MMM to $115), dividends cushion to ~-5% total. MO and BMY relative outperformers given lower duration.
The Overlooked Read-Through
Consensus is treating these names as “defensive rotation” plays — wrong framing. The real driver is the August 1 Treasury refunding announcement and the September FOMC. If the QRA reduces long-end coupon issuance and the Fed delivers even a 25 bps cut, the 10Y compresses to 3.9% by year-end per Morgan Stanley’s May 19 base case. At that yield, every name above re-rates 10–15% on multiple expansion alone, before any dividend income.
The Mistake to Avoid: Chasing the Highest Yield
The number-one error in this category is ranking by yield. WBA (Walgreens) trades at ~10% yield as of May 23 — Moody’s downgraded the senior unsecured to Ba2 on March 28 with negative outlook, the front-end CDS implies a 5-year cumulative default probability of roughly 28% per Bloomberg pricing, and the Q2 FCF coverage of the current $0.25 quarterly DPS sits at 0.9x. That combination is what “unsafe dividend” actually looks like on a screen. A 10% yield that gets cut to zero is a 60% drawdown; a 5% yield that compounds for ten years at flat valuation returns 63% in cash alone. Always cross-check the trailing FCF coverage ratio before the yield number. Float and short interest matter less in this category than in growth names — what kills you here is the payout-ratio cliff.
Honorable Mentions
Three names that nearly made the cut but had one filter issue:
T (AT&T) — 5.2% yield, but the dividend was reset lower in 2022 so it fails the “five-year flat or growing” filter until 2027.
ENB (Enbridge) — 6.3% yield, excellent coverage, but Canadian withholding tax complicates a US screener.
VICI Properties — 5.4% yield, but the screen weighted O higher on tenant diversification (Realty Income has 1,500+ tenants vs. VICI’s concentrated gaming exposure).
What to Watch: 10Y Yield and June 6 Payrolls
Watch whether the 10Y holds below 4.45% — every basis point above caps the upside on O and MMM.
Key level: CME FedWatch September cut probability above 50% reprices this entire cohort.
If May payrolls (June 6, 8:30 ET) print below 150K then rate-sensitive names (O, VZ, KMI) lead the cohort; if above 200K, defensives (MO, BMY) outperform.
Trigger: Treasury QRA announcement August 1, then FOMC September 17.
This screener is refreshed every 4–6 weeks.
Related Stock Radar Analysis
Screen results are a starting point. These pillars give you the framework to filter further:
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