There Are Only a Handful of S&P 500 Stocks That Yield Over 5%. Here's My Top Pick to Buy Before the End of August.

The S&P 500 currently yields about 1%, which is quite low. Consequently, stocks yielding five times that amount demand careful consideration. Real Estate Investment Trust (REIT) Realty Income (NYSE: O) stands out as a high-yield stock appealing to conservative investors. An REIT structure allows income distribution to shareholders efficiently, resulting in high yields within this sector.

At 5.1%, Realty Income's yield surpasses both the S&P 500 and the average REIT yield of 3.5%. Despite being a large, steady player, the dividend contributes significantly to total returns. Its strong balance sheet, 31-year dividend growth streak, and monthly payouts simplify budgeting. The company owns over 15,500 properties, positioning it as the leading net lease operator.

More than 80% of its rents stem from retail properties, the most liquid net-lease niche. The remaining properties encompass industrial spaces and unique types like casinos and data centers. Diversification extends to Europe, accounting for approximately 20% of rents. While growth remains gradual, management has expanded into new areas, including Europe, casinos, data centers, debt investments, and asset management services for institutional investors.

This model, established over decades, is likely to continue supporting steady dividend growth. Realty Income is not a high-growth stock, but its reliable dividend makes it an attractive option for risk-averse investors.