Chris Lange
6 min read
Quick Read
-
Coca-Cola and Johnson & Johnson now yield less than the 10-year TIPS real return, yet both stocks have surged roughly 40% this year on earnings growth.
-
Realty Income lost 22% in 2023 as real yields climbed, then rebounded 22% once they peaked, and Verizon also still out-yields TIPS.
-
A climb back above the 2.95% October high in real yields would signal renewed pain for income stocks.
-
Building a portfolio and living off one are two completely different skills, and almost nobody teaches the second. This problem is what The Definitive Guide to Retirement Income helps, and it is free today. Read more here. (Sponsor)
Although Wall Street’s best-known dividend payers have spent 2026 rewarding patient shareholders, the bond market has raised the bar. The 10-year Treasury Inflation-Protected Security, or TIPS, yielded 2.66% on November 9, 2026, up from 1.84% on November 10, 2025. That yield is earned above inflation, and the U.S. Treasury backs it for anyone who holds to maturity. But the last time real yields climbed this high, the stocks that income investors rely on most took the first hit.
Here is how it works. A TIPS holder’s principal rises with the Consumer Price Index, so the 2.66% is a gain in purchasing power. A dividend stock has to grow its payout to keep up with inflation. That is why rising real yields tend to pull money out of income stocks. Four classic names, Johnson & Johnson (NYSE:JNJ), Procter & Gamble (NYSE:PG), Coca-Cola (NYSE:KO), and Exxon Mobil (NYSE:XOM), now yield less than the TIPS real return. Realty Income (NYSE:O) and Verizon (NYSE:VZ) still yield more.
——
Now Available: The Definitive Guide to Retirement Income
Many successful investors eventually reach the same moment. The saving is done, the portfolio is built, and the question quietly changes from how much can I grow this to how much can I take out? Get that second question wrong and decades of good investing can come apart in a handful of years.
That is exactly what The Definitive Guide to Retirement Income helps answer. It covers what your retirement could actually cost, which income sources are worth using, and the withdrawal math that decides whether the money lasts. It is free today from Fisher Investments. Read More Here ›
——
2023 Already Ran This Experiment
The 10-year TIPS yield climbed from 1.34% on January 6, 2023, to 2.52% on October 25, 2023. Realty Income, the most bond-like stock in the group, posted a total return of -21.98% from the end of 2022 through October 2023, dividends included. Over the same period, an index fund tracking the benchmark S&P 500 returned 10.58%. The gap was the price of owning a yield proxy while the risk-free real return kept rising.
