Pitney Bowes (PBI), Best Buy (BBY): How the S&P’s Top Dividend Stocks Have Fared in 2013

The other big dividend cut among the top S&P yielders came from CenturyLink, Inc. (NYSE:CTL), which had a 7.5% dividend yield at the beginning of the year and has fallen by 9% since then. The high-yielding rural-focused telecom company reduced its dividend by 25%, resulting in an investor exodus not only from CenturyLink but also from its high-yielding rural-telecom peers. Yet the interesting thing about the announcement was that it came with a $2 billion share-buyback program, reflecting a decision to reallocate capital rather than suggesting a lack of profits. Indeed, with ample cash flow to pay the dividend, CenturyLink’s decision could well prove to be a smart move if its stock stays cheap for long enough for the company to implement its buyback soon. Moreover, CenturyLink still yields more than 6% — hardly a low yield even for telecom stocks.

Watch those dividends
The key to understanding high-yielding stocks is that you always have to ask why a dividend yield is so high. Being highly discriminating in your choices among high-dividend stocks can save you from train wrecks and boost your income.

The article How the S&P’s Top Dividend Stocks Have Fared in 2013 originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.