If you invest in an S&P 500 index fund, you'll receive a dividend yield in the ballpark of 1.7%. Many of the stocks in the major index pay dividends. Some of them have dividend yields a lot higher than what you can get from an S&P 500 index fund.

The five highest-paying dividend stocks in the S&P 500 offer yields of 6.95% or greater. But should you buy these stocks?

Dividends written on a chalkboard surrounded by drawings.

Image source: Getty Images.

The top five

These are the S&P 500's five highest-yielding dividend stocks:

Stock Dividend Yield
Pioneer Natural Resources (PXD 0.63%) 13.2%
Altria Group (MO 0.70%) 8.02%
Devon Energy (DVN 0.84%) 8.01%
Verizon Communications (VZ 2.85%) 6.99%
Newell Brands (NWL 2.74%) 6.95%

Data sources: Finviz, Google Finance.

Pioneer Natural Resources is a Dallas-based major independent oil and gas producer based. The company's dividend consists of two components -- a base dividend plus a variable dividend that changes depending on how much free cash flow Pioneer generates.

Altria Group is a tobacco company based in Richmond, Virginia. Its products include Marlboro cigarettes and Skoal smokeless tobacco. Altria has increased its dividend 57 times over the past 53 years.

Devon Energy is a U.S. oil and gas producer from Oklahoma City. Like Pioneer Natural Resources, Devon's dividend includes both a fixed component and a variable component based on free cash flow.

Verizon Communications is a telecommunications provider based in New York City. The company has increased its dividend for 16 consecutive years.

Newell Brands is an Atlanta-based global consumer goods company. Its brands include Rubbermaid, Calphalon, Sharpie, and Sunbeam. Newell hasn't increased its dividend since 2017. 

What to consider

Investors shouldn't just look at the high dividend yields of these stocks. There are also several other things to consider.

One of the most important is the sustainability of the company's dividend. Pioneer and Devon, in particular, could experience volatility with their dividend payouts because of the variable component. For example, Devon's total dividend has fallen two quarters in a row as a result of lower free cash flow.

You'll also want to evaluate the stock's overall prospects. If the stock declines over time more than you receive in dividends, you'll lose money. One key factor to check out to determine the prospects for a stock is its earnings growth potential. 

Valuation is another important consideration. Even stocks with strong earnings growth can fall if their valuations are too frothy.

To buy or not to buy

So are these five highest-yielding dividend stocks in the S&P 500 good picks to buy right now? It's a definite maybe, depending on your investing preferences.

If you're primarily focused on growth, you might be better off looking elsewhere. The same is true if you're risk-averse. All of these stocks face risks. For example, Pioneer's and Devon's fortunes hinge largely on oil and gas prices. Verizon's business could be disrupted in part by a new technology that makes it easier for customers to try other wireless providers. An economic decline could hurt all five of these companies.

Some could also be opposed to buying shares of Altria because of the nature of the company's business. The use of tobacco, for example, has been proved to increase the chances of getting cancer. Altria will be a no-go for anyone who doesn't want to own the stock of a company whose products present serious health risks.

On the other hand, if you're seeking income, all of these stocks could be attractive. Sure, it's possible that Pioneer and Devon could pay lower dividends from time to time, but I suspect their yields will still appeal to many income investors.