Dividend stocks could soon get a closer look from investors. That’s because the Federal Reserve is expected to cut rates on Wednesday, beginning a new cycle of lower rates, which will bring down Treasury yields and interest rates on savings accounts.

That process makes dividend stocks more attractive. Dividend stocks are likely to move higher as bond yields fall because bond investors will rotate back into dividend stocks in search of yield.

If you’re looking for dividend stocks, a good place to start your search is the S&P 500. Let’s take a look at the three highest-yielding dividend stocks in the broad-market index today.

1. Walgreens Boots Alliance (dividend yield: 11.1%)

If you’re a dividend investor, it’s important to understand the difference between a high-yield stock and a yield trap, and Walgreens Boots Alliance (NASDAQ: WBA) looks like a classic example of a yield trap.

Shares of the pharmacy chain are down a whopping 65% year to date, declining steadily as it’s struggled with a loss of COVID-related revenue, narrowing margins in its pharmacy business, an ongoing decline in the retail business, and challenges related to the misguided acquisition of VillageMD, a primary care clinic, which has led to significant losses in the business.

According to conventional metrics, Walgreens now looks dirt cheap, trading at a forward P/E of just above 3, but that’s based on adjusted earnings. However, that likely reflects investor fears over more write-downs and falling profits in the coming quarter. In fact, the company has taken impairment charges of $13.6 billion this year, mostly related to its acquisition of VillageMD.

It also had a negative free cash flow of $1.5 billion this year.

Walgreens could be forced to cut its dividend again, and the company seems likely to be removed from the S&P 500 soon as its market cap falls below $8 billion. The stock is best avoided.

2. Altria (dividend yield: 7.9%)

Altria Group (NYSE: MO) was one of the top-performing stocks in the market for roughly 50 years through 2017, but that’s changed more recently as smoking rates continue to decline and the company has struggled to evolve with new tastes.

Its $12.8 billion investment in JUUL Labs imploded and it also lost most of its investment in cannabis grower Cronos Group.

More recently, the company acquired NJOY for exposure to the vape market.

Tobacco stocks surged through the spring as investors seemed to sense a turning point as next-gen products went mainstream. Plus, bond investors may be preparing themselves for the rotation into dividend stocks.

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Altria is a solid dividend payer with a yield of 7.9%, and the company has raised its dividend 59 times in the last 55 years.

I’m still skeptical of the company’s ability to grow long-term given the decline in cigarettes, but you could certainly do worse than Altria if you’re looking for a high-yield dividend stock as its 7.9% yield is well-funded and reliable.

3. Ford Motor Company (dividend yield: 5.6%)

Like Altria, Ford Motor Company (NYSE: F) has been a leader in its industry for generations, but the stock has struggled in recent years as the company has lost money in international markets, watched demand for electric vehicles (EVs) plateau, and seems stuck growing slowly in a mature industry.

Shares tumbled following its second-quarter earnings report as the company expects a $5 billion loss in the EV division, and profits fell in the second quarter, due in part to pressure in the EV division and slowing demand.

The good news is that Ford’s other divisions, its combustion vehicle division, and its commercial vehicles, remain highly profitable.

For the full year, Ford expects an adjusted operating profit of $10 billion to $12 billion and adjusted free cash flow of $7.5 billion to $8.5 billion. That makes the stock look cheap, trading at just 4 times its adjusted operating profit and 5 times its adjusted free cash flow.

Ford now pays a dividend yield of 5.6%. If the company can benefit from the growth of hybrid vehicles, the stock could move higher from here. While Ford has underperformed the market for years, it looks like a decent buy at the current price, especially if you’re looking for a high-yield dividend stock.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Cronos Group. The Motley Fool has a disclosure policy.

Should You Buy the 3 Highest-Paying Dividend Stocks in the S&P 500? was originally published by The Motley Fool