The S&P 500's dividend yield, which hovers around the 1.6% range, isn't exactly jaw-dropping by most standards. However, plenty of companies in the S&P 500 offer dividend yields much higher than that. Of the top five highest-yielding dividend stocks in the S&P 500, none have a yield of less than 7.4%.

Company Dividend Yield
Pioneer Natural Resources (PXD) 12.52%
Devon Energy (DVN 0.33%) 9.47%
Lincoln National (LNC -1.97%) 8.28%
Altria Group (MO -1.00%) 7.83%
Coterra Energy (CTRA -1.51%) 7.42%

Data source: YCharts.

Here is some information about the five companies to help you decide if investing in them is right for you.

1. Pioneer Natural Resources

Pioneer Natural Resources is an Irving, Texas-based oil and natural gas exploration and production company. Unlike most dividend-paying companies, Pioneer Natural Resources has a set dividend and then a variable dividend based on the company's free cash flow.

The company pays 75% of its free cash flow out in the variable dividend, so its yield is high largely due to the high profits energy companies have had over the past year and a half or so.

2. Devon Energy

Devon Energy is based in Oklahoma City, and focuses on energy exploration. The company also uses a variable dividend system that's based on its free cash flow (up to 50%), so similar to Pioneer Natural Resources, its high dividend yield can be attributed to higher energy prices as of late.

Still, Devon Energy has outperformed the other stocks on this list in the past few years by a considerable margin.

3. Lincoln National

It's been a rough year for life insurance and retirement services company Lincoln National, with the company shares falling more than 30% year to date. The reduced share price is largely why the company's dividend yield is so high.

The company's life insurance and annuities businesses have been trending in opposite directions. In 2022, its life insurance business had a $1.9 billion operating loss, but its annuities business had a $1.3 billion operating profit.

The steep life insurance loss may rightfully worry investors about Lincoln National's ability to maintain its dividend, so that's something to keep an eye on because investors may decide to jump ship.

4. Altria Group

Tobacco giant Altria Group has one of the world's most iconic brands, Marlboro, to thank for a lot of its success. Although Marlboro  cigarette sales pad the company's bottom line, there isn't much room for growth in the tobacco category, especially in the U.S. This potential lack of growth is why the company has such a hefty dividend.

The company is in good financial standing, so investors shouldn't have concerns about the stability of the dividend. With economic conditions less than ideal right now, Altria can also serve as a bit of a defensive stock because many tobacco consumers won't alter their spending habits.

5. Coterra Energy

Houston-based Coterra Energy also uses a variable dividend system. The company aims to use about half of its free cash flow for dividends, which has paid off for investors, given higher energy prices.

The company says it wants to focus more on share buybacks in the short term, so it shouldn't surprise investors if the company decides to lower its dividend payout a bit.

Dividends are one piece to the full equation

Investors generally don't invest in dividend stocks expecting market-beating stock price gains, but stock prices can't be ignored. Dividends and a stock's price appreciation account for its total return, ultimately determining how much you make (or lose) on an investment.

All five listed stocks have admirable dividend yields, but looking at their total returns can give more perspective.

MO Total Return Level Chart

Data source: YCharts

Only Devon Energy outperformed the S&P 500 in total returns in the past five years. Past performance shouldn't be your only deciding factor, but it's worth considering before investing.

If your main goal is to have dividend income, avoid value traps and invest in companies whose dividends are sustainable. A high dividend doesn't do much good if it gets cut before you can receive an adequate return on your investment. Keep that in mind while considering energy companies with variable dividend policies.

If your main goal is dividend stability, Altria is likely your best bet, although its stock price seems like it will be sluggish for the foreseeable future.