To The Moon

High-Dividend Stock Guide: When the Tide Goes Out, Who's Swimming Naked and Who’s Still Standing Strong?

"You don't find out who's been swimming naked until the tide goes out."This classic saying in finance was uttered by Warren Buffett at the 1994 Berkshire shareholders meeting.

There are two main logics in U.S. equity investing: one is making money from valuation expansion (benefiting from market liquidity), and the other is earning the company's long‑term intrinsic value and moat. Buffett's quote reminds us:

In bull markets or periods of abundant capital, many problems are masked by the “water level”: weak profitability, aggressive expansion, over‑reliance on a single customer/channel, and survival dependent on financing. Once the environment deteriorates (the tide refers to an external environment of ample liquidity), these vulnerabilities are quickly exposed, and it becomes obvious who’s been swimming naked.

Buffett is known for favoring stocks with stable dividend income. Dividend yield can serve as our screening metric. Price changes of the S&P 500 constituents as of the “Black Thursday” on November 20 shows that 408 companies paid dividends over the past year.

As shown in the chart: orange dots on the vertical axis represent the price change on November 20, and red dots represent dividend yield. Stocks with lower dividend yields exhibited greater volatility and a higher likelihood of decline. On Thursday, 27 S&P 500 constituents fell by more than 5%, and without exception, these 27 had dividend yields below 1.3%.

Below are S&P 500 stocks with dividend yields above 2.5% that closed higher yesterday. Among these 24 names, 7 are consumer stocks and 7 are utilities. The rest are spread across healthcare, financials, and industrials.

Selected Companies Overview

$CME Group Inc(CME)$   is a “utility‑like” financial giant that fits Buffett's investment logic of “moat, cash flow, perpetual operation, margin of safety.” Its business benefits from network effects: as one of the world's largest derivatives exchanges, CME's rate futures (such as U.S. Treasury futures), FX futures, and commodity futures (such as crude oil and gold) command over 80% global market share. The more counterparties there are, the stronger the liquidity and the fairer the pricing, which in turn attracts more participants, creating a “winner‑takes‑more” cycle.

Its revenue comes mainly from trading fees, clearing fees, and data services—light‑asset income with “no inventory and no receivables,” highly resilient through cycles. Even during extreme environments such as the 2008 financial crisis and the 2020 pandemic, CME's revenue growth stayed positive as market volatility actually boosts derivatives volume. The company has long maintained a dividend yield above 3% and continues to enhance per‑share value via buybacks.

$Prudential(PRU)$  : The company exhibits the hallmarks of a “Buffett‑style financial stock.” Buffett favors “businesses that can consistently generate abundant free cash flow,” and PRU's cash‑flow model fits closely. Insurance float is substantial, providing a stable, low‑cost funding pool for investment—Buffett's “financial leverage supertool.”

$Johnson & Johnson(JNJ)$   : In Q3 2025, the company's total revenue reached $23.993 billion, growing by 6.8% y/y, with adjusted EPS of $2.80, increasing by 15.7% y/y. Oncology drug Darzalex sales rose 22% y/y, supporting segment revenue of $15.56 billion (+6.8% y/y). In Medtech sector, surgical robotics revenue grew 12% y/y, serving as the core growth driver, with overall segment revenue at $8.43 billion, up 5.6% y/y. In a volatile market, J&J's high dividends (2.50%) and stable cash flow offer strong defensiveness.

$Procter & Gamble (PG.US)$ : revenue reached $22.386 billion, up 3% y/y. GAAP EPS rose 21.1% y/y; adjusted EPS was $1.99, up 3.1% y/y. SK‑II sales increased 12%.

$Williams (WMB.US)$ : The company is North America's leading midstream natural gas infrastructure player, with over 30,000 km of pipelines and large storage facilities—making it a “critical hub” in the gas supply chain. Its customers include giants like ExxonMobil and Chevron; long‑term service agreements (LTSA) lock in 80%+ of revenue, with strong irreplaceability. Similarly in natural gas, Dominion Energy and WEC Energy have regional utility monopolies and high dividends, making them “defensive cash‑flow plays.”

$NextEra Energy (NEE.US)$ combines upside elasticity with downside resilience through its positioning in solar, wind, and other renewables. Its current dividend yield is 2.6%.

$Prologis (PLD.US)$: The company is a dominant logistics real estate infrastructure network. Logistics is the “vascular system” of the economy—so long as there is production and consumption, demand for warehousing and logistics is perpetual. Its sites are close to transport hubs and city centers, offering strong scarcity value. Average lease terms are 5–7 years, and 80%+ of leases include annual rent escalators (2–3% or CPI‑linked), providing natural inflation protection.

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