Dividends play an important role in the total returns of many stocks. That's especially the case with stocks in the S&P 500

The average dividend yield for the S&P 500 is close to 1.6%. However, there are some members of the index that offer much more attractive yields. Should you buy the five highest-paying dividend stocks in the S&P 500?

At the top

Those five dividend stocks at the top of the heap are:

Stock Dividend Yield
Pioneer Natural Resources (PXD) 11.49%
Devon Energy (DVN 0.23%) 9.34%
Coterra Energy (CTRA 1.55%) 8.69%
Altria Group (MO 0.32%) 8.53%
KeyCorp (KEY 2.26%) 8.32%

Data source: Yahoo! Finance.

There are at least two common denominators for three of these companies. Pioneer Natural Resources, Devon Energy, and Coterra Energy are all in the oil and gas exploration and production business. The dividend programs for all three companies also include a fixed base component and a variable component.

Altria Group has been a longtime favorite for income investors. The tobacco giant belongs to the elite group known as the Dividend Kings. Altria has increased its dividend for 53 consecutive years. 

KeyCorp is a regional bank based in Cleveland, Ohio. Its dividend yield hasn't always been so high. However, the banking crisis has caused KeyCorp stock to plunge this year, driving its yield up significantly.

What Wall Street thinks

Does Wall Street think these five high-yielding dividend stocks are good picks? The answer is a resounding "yes" for most of them.

All but five of the 40 analysts surveyed by Refinitiv in June rate Pioneer Natural Resources as a buy or strong buy. No analyst recommended selling the stock. The consensus 12-month price targe reflects an upside potential of over 25%.

Twenty-three of the 32 analysts covering Devon recommend the stock as a buy or strong buy. The other nine analysts rate the stock as a hold. The average price target for Devon is more than 30% above its current share price.

Wall Street isn't quite as bullish about Coterra. Only nine of the 28 analysts surveyed by Refinitiv rate the stock as a buy or strong buy. However, none of the analysts recommended selling the stock. Also, the average price target reflects an upside potential of 27%.

Analysts think that Altria has the least room to run among these five stocks. The consensus price target is less than 13% higher than the tobacco stock's current price. Still, though, eight of 14 analysts rate Altria as a buy or strong buy with no sell recommendations.

One analyst thinks that KeyCorp will underperform going forward. However, 18 of the 28 analysts surveyed by Refinitiv recommend the bank stock as a buy or strong buy. And the folks on Wall Street who like KeyCorp are especially bullish: The average price target reflects an upside potential of nearly 57%.

Are the analysts right?

Wall Street analysts can be wrong, of course. But are they right about these five stocks? 

My personal view is that the three oil stocks on the list should perform relatively well over the next few years. The near term could be iffy, though. It's possible that a U.S. recession and/or weaker demand in China could hold down oil prices. On the other hand, Saudi Arabia's production cuts could boost prices.

Income investors should keep in mind that it's not just the share prices of Pioneer, Devon, and Coterra that hinge on oil prices. Each company could also reduce the variable portion of its dividend if oil prices decline.

Altria is a controversial stock. If you're OK with owning shares of a company whose products have caused major health problems for years, the dividend will be attractive. Altria is also shifting its focus to smokeless products.

That leaves KeyCorp. I suspect it could take a while for the dust to settle from the banking crisis. However, KeyCorp's dividend appears to be sustainable. The stock is also dirt cheap right now. I think that investors who take a long-term perspective should like KeyCorp.