3 High Dividend Large Caps Worth Buying

With the S&P 500 soaring to record levels over the past year, most of its constituents' dividend yields aren't what they used to be. However, there are still some juicy high yielding stocks to consider.

With a lofty dividend return often comes skepticism as to whether a company's dividend is truly sustainable—or if it's dividend yield is high because the investment carries a ton of risk due to some fundamental flaw in the business.

But doing your homework to determine why a dividend yield is so high can uncover some golden opportunities to cash in on generous dividend payments. Here are three high yield large caps for income-oriented investors to buy and hold in this low-interest rate environment.

Is ONEOK in Good Financial Health?

Through its interest in ONEOK Partners Limited Partnership, ONEOK (NYSE:OKE) is synonymous with natural gas. It is involved in the gathering and processing of natural gas, natural gas pipelines, and natural gas liquids (NGL).

These assets generate distributable cash flow that ultimately finds its way into shareholders' accounts in the form of big-time dividend payments. The NGL business is ONEOK's biggest growth opportunity and accounts for about three-fourths of its revenue. Through this operation, ONEOK provides various services to NGL producers from its facilities located in several Southern, Middle American, and Rocky Mountain states.

As the economic recovery has unfolded, natural gas exploration and production (E&P) companies have fired back up the grill leading to better volumes flowing through ONEOK's pipelines.

This is also leading to better numbers flowing through ONEOK's financial statements. Its $447 million cash position is more than 20 times what it was heading into the COVID-19 outbreak. This supports the company's ability to pay a quarterly dividend close to $1 per share which equates to a dividend yield of almost 9%.

ONEOK is well-positioned in the country's high production natural gas regions. As volumes ramp back up in line with economic activity, investors can expect a return to growth, improved cash flow, and dividend payments backed by strengthening financials at ONEOK.

What is a Good Bank Stock to Buy?

People's United Financial (NASDAQ:PBCT) is one of the nation's best-run savings and loan institutions. The Connecticut-based bank has seen it all throughout its almost 180-year history weathering market crashes and relishing in economic prosperity.

Today it offers the full gamut of financial services to commercial and retail customers in addition to wealth management. Of course, with interest rates as low as they are, the bank will need to continue to lean on non-interest income for growth in 2021. In the fourth quarter of last year non-interest income jumped 44% due a surge commercial lending and cash management fees.

While old school banks like People's United typically come with low valuations, this stock is especially cheap. It trades for less than 1x book value and has an EV/EBITDA ratio of 4.5x.

An investment People's United Financial comes with a 5% dividend yield and represents an attractive way to play the financial sector reflation trade. The company has hiked its dividend in each of the last 27 years and given its financial strength this streak is likely to continue. With $4.2 billion of cash on the books and an increasing interest coverage ratio, investors can bank on collecting a reliable dividend while participating in financial sector upside as the year progresses.

Is AbbVie a Good Dividend Stock?

Finally, pharmaceutical powerhouse AbbVie (NYSE:ABBV) is another generous dividend payer with 'buy' written all over it. The stock currently offers a 5% dividend yield to go along with the growth potential of its extensive drug portfolio.

Last week AbbVie turned in an excellent fourth-quarter performance that beat the Street on the top and bottom lines. Sales of immunology, hematology, and oncology pharmaceuticals as well as a sharp rebound in BoTox sales outweighed the ongoing impact of COVID-19 on some drug sales.

AbbVie's immunology portfolio includes blockbuster arthritis drug Humira which is forecast to post record U.S. sales growth this year and international sales close to $3 billion. It also includes Rinvoq and Skyrizi, treatments for rheumatoid arthritis and psoriasis, which together are expected to see sales nearly double to $4.6 billion in 2021.

The company's hematology/oncology portfolio is slated to grow at a double-digit pace this year led by strength in cancer drug Imbruvica. Add in a continued rebound expected in the recently acquired Botox Cosmetics business, and it's clear that AbbVie's financials will get a major facelift over the next several quarters.

At the midpoint, AbbVie management is projecting revenue growth of about 18% in 2021. This along with opportunities to improve its cost structure absent some COVID-19 headwinds, should lead to a financially fitter AbbVie as the year progresses.

Abbvie stock has the highest dividend yield among major U.S. drug manufacturers. Significant growth is expected to be derived from all three AbbVie segments this year and its promising portfolio of late-stage drug candidates will likely carry the torch from there. While many investors will continue to focus on COVID-19 vaccine companies, AbbVie will be going about its business of delivering well-balanced growth and income to its shareholders.