In this article, we will take a look at the 10 Best Dividend Stocks with 5%+ Yields and Growing Cash Flows.
Dividends have played a bigger role in equity returns than most people realize. Since 1936, they’ve accounted for roughly one-third of the S&P 500’s total return, with capital appreciation making up the other two-thirds, according to S&P Dow Jones Indices. Today, most market participants understand that sustainable dividend income and capital appreciation together shape total return expectations. But chasing high yields can be a trap.
Morningstar’s 2026 report on dividend investing warned that unusually high payouts often signal business weakness rather than financial strength. The firms it pointed to, Walgreens Boots Alliance, Intel, 3M, and Shell, all had long dividend histories before eventually cutting payouts when business conditions turned against them.
The report flagged three things investors should watch: high payout ratios, weak competitive advantages, and poor financial health. Companies stretched on all three fronts have historically been the most vulnerable to dividend cuts. Morningstar also made the case for thinking beyond income alone. When a company cuts its dividend, its share price typically falls, so investors lose on both ends. Treating dividend investing as a total-return strategy, rather than a pure income play, helps avoid that double hit.
The core takeaway from the report is straightforward. Sustainable cash flows, durable dividends, and strong business fundamentals tend to deliver better long-term outcomes than simply going after the highest yield available.
Given this, we will take a look at some of the best dividend stocks with 5% yields and growing cash flows.
Our Methodology:
For this list, we screened for companies with dividend yields above 5%, as of May 14. From that list, we identified companies with free cash flow for a trailing twelve-month period of more than $500 million. Finally, we picked stocks with a short %age of float below 4%, and ranked them accordingly.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. W. P. Carey Inc. (NYSE:WPC)
Short Percentage of Float: 3.91%
Dividend Yield as of May 14: 5.01%
Levered Free Cash Flow: $664.4 Million
On May 12, Scotiabank raised its price recommendation on W. P. Carey Inc. (NYSE:WPC) to $79 from $73. It reiterated a Sector Perform rating on the shares. The analyst said Q1 earnings across the net lease REIT sector reflected stronger AFFO and higher investment guidance throughout the firm’s coverage universe. Many REITs also issued forward equity during or after the quarter to meet funding needs for the rest of the year, the research note stated.
On April 30, RBC Capital raised its price target on WPC to $73 from $72 while keeping a Sector Perform rating on the stock. The analyst said the company’s Q1 results were mostly in line with expectations, especially since it had already reported solid acquisition activity, which pointed to a likely increase in guidance.
W. P. Carey Inc. (NYSE:WPC) is a net lease real estate investment trust with a commercial real estate portfolio that includes 1,703 net lease properties spanning about 185 million square feet. The company focuses on corporate sale-leasebacks, build-to-suit projects, and acquiring single-tenant net lease properties.
9. Prudential Financial, Inc. (NYSE:PRU)
Short Percentage of Float: 3.41%
Dividend Yield as of May 14: 5.43%
Levered Free Cash Flow: $10.3 Billion
On May 12, Wells Fargo analyst Wes Carmichael raised the firm’s price target on Prudential Financial, Inc. (NYSE:PRU) to $100 from $93 and maintained an Underweight rating on the shares. The firm said it was also updating estimates to reflect Q1 actual results, recent strength in equity markets, and company-specific adjustments.
On May 11, Piper Sandler analyst John Barnidge raised the firm’s price target on Prudential Financial to $105 from $99 while keeping a Neutral rating on the stock. The firm noted that Prudential delivered results well above both Piper’s estimates and broader consensus expectations, supported by strong year-over-year growth. The report pointed to a large pension risk transfer that partly contributed to the earnings beat of $1.4B in Q1 2026, compared to 0c in Q1 2025. Corporate and Other results were also viewed as stronger than the firm’s expectations.
Prudential Financial, Inc. (NYSE:PRU) is a financial services provider and global investment manager. The company offers life insurance, annuities, retirement-related products and services, mutual funds, and investment management solutions.
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