Investors are looking more and more to a stock's yield before making a decision to jump in. The dividend helps to reduce volatility and accelerate return of capital. Even if the stock goes nowhere, at least the dividend can provide a return.

Stockpickr has reviewed the stocks in the S&P 500 and compiled a portfolio of the Top S&P 500 Stocks by Yield. The stocks all have P/E ratios of less than 20 and PEG ratios of less than 2.

One of the highest-yielding S&P 500 stocks is ProLogis (PLD), a real estate investment trust that owns and operates real estate, primarily distribution facilities, in North America, Europe and Asia. ProLogis yields 9.3%. The company just announced that it has agreed to lease roof space to Portland General Electric (POR) for the construction of multiple photovoltaic systems in Portland amounting to 1.1 megawatts. ProLogis has a P/E of 6 and a PEG of 1.13.

ProLogis is owned by DE Shaw, a $50 billion global investment firm founded in 1988. It has offices in New York, London, Silicon Valley, Houston, Kansas City, San Francisco, D.C., Bermuda and India. Shaw also owns Exxon Mobil (XOM), which yields 2.4%; General Electric (GE), which yields 6.3%; and Procter & Gamble (PG), with a 2.6% yield.

Another high-yielder is Centurytel (CTL), an integrated communications company with an 8.6% yield. Its earnings call is scheduled for Thursday, Oct. 30. The stock has a P/E of 9 and a PEG of 1.61.

The stock is owned by the Vanguard Telecom Services Index Fund, which is managed by Ryan Ludt. The fund has had an average annual return of 19.39% over the last three years. It also owns Verizon Communications (VZ), which yields 6.8%; Sprint Nextel (S), which yields 3.3%; and Embarq (EQ), with an 8.3% yield.

Constellation Energy Group (CEG) is another high-yield S&P 500 stock, paying a dividend of 7.9%. This gas and electric utility reported that MidAmerican Energy Holdings, a subsidiary of Warren Buffett's Berkshire Hathaway (BRK.A), said that it would acquire Constellation. Constellation has a P/E of 5 and a PEG of 0.28.

Constellation is owned by Hancock Horizon Value Trust, which has a Morningstar rating of five stars and is managed by David Lundgren. The fund has had an average annual return of 18.35% over the last five years. It also owns Precision Castparts (PCP), which yields 0.2%, and Cummins (CMI), which yields 2%.

For more ideas, check out the Top S&P 500 Stocks by Yield portfolio at Stockpickr.com.

Posted on Oct. 23, 2008