In this article, we will take a look at the 10 Best May Dividend Stocks to Buy.
Investing in dividend stocks sounds straightforward, but it takes more work than it seems. A basic yield is only part of the picture. Investors often need to look deeper to understand how reliable those payouts are and what drives them.
Dividends are usually linked with long-term returns. Some investors, though, try to generate short-term gains through a method known as dividend capture. The idea is simple, which involves buying shares just before a company pays its dividend, then selling them soon after receiving that payment. In doing so, investors aim to collect the dividend and, at times, benefit from a rise in the stock price ahead of the payout.
Over time, analysts have adjusted this strategy in different ways to improve results. Harry Domash discussed a variation of this approach in an interview with MoneyShow. He said the key step is selling the stock just before the ex-dividend date. Stock prices often move higher after a dividend is announced and can continue to rise into the ex-dividend date. On that date, prices may drop. Domash pointed out that instead of waiting to see how the stock reacts, investors should buy shares the day before they go ex-dividend. He also noted that buying the day after the announcement can work. Using this approach, investors may generate average returns of around 3% to 4% per trade.
Given this, we will take a look at some of the best dividend stocks to buy in May.
Photo by Sharon McCutcheon on Unsplash
Our Methodology:
For this list, we selected dividend stocks that will trade ex-dividend in May 2026. The ex-dividend date indicates the cutoff day to buy a stock to receive its upcoming dividend payment. We picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts. The stocks are ranked according to their ex-dividend dates.
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. NRG Energy, Inc. (NYSE:NRG)
Ex-Dividend Date: May 1
On April 21, Morgan Stanley lowered its price recommendation on NRG Energy, Inc. (NYSE:NRG) to $154 from $157. It reiterated an Equal Weight rating on the shares. The analyst said the firm is updating price targets across Regulated & Diversified Utilities and IPPs in North America under its coverage. In March, utilities outperformed the S&P 500.
During its Q4 2025 earnings call, management shared an updated long-term outlook. Lawrence Coben, CEO & Chairman of the Board, said the company was rolling its outlook forward and continued to target at least 14% annual growth in adjusted EPS through 2030. He added that the projection did not include any additional data center contracts or potential increases in power or capacity pricing.
Bruce Chung, EVP & CFO, reaffirmed the company’s 2026 financial guidance that had been announced earlier in the month. He noted that the guidance included 11 months of earnings from recently acquired generation assets, along with CPower. Based on the midpoints of the reaffirmed ranges, adjusted EBITDA was expected to reach $5.575 billion, adjusted net income to $1.9 billion, adjusted EPS to $8.90 per share, and free cash flow before growth to $3.05 billion.
NRG Energy, Inc. (NYSE:NRG) is an energy and home services company. Its business includes the sale of electricity and natural gas to residential, commercial, industrial, and wholesale customers. It also operates wholesale electric generation and sells smart home products and services.
9. Texas Instruments Incorporated (NASDAQ:TXN)
Ex-Dividend Date: May 5
On April 23, Wolfe Research raised its price recommendation on Texas Instruments Incorporated (NASDAQ:TXN) to $315 from $260. It reiterated an Outperform rating on the shares. The move followed what the analyst described as “strong” Q1 results and Q2 guidance, supported by growth in industrial and data center markets. The analyst also noted that management “was more bullish on pricing than we’ve heard in the past.”
On the same day, Truist Financial raised its price target on TXN to $278 from $225 and maintained a Hold rating. The analyst said the company delivered an excellent Q1 and solid Q2 guidance, with demand expanding beyond AI and data centers into industrial markets. The firm added that trends could improve further for suppliers with greater leverage or those whose margins have not yet recovered.
Texas Instruments Incorporated (NASDAQ:TXN) is a global semiconductor company that designs, manufactures, tests, and sells analog and embedded processing chips. Its products serve a range of markets, including industrial, automotive, personal electronics, communications equipment, and enterprise systems.
8. D.R. Horton, Inc. (NYSE:DHI)
Ex-Dividend Date: May 7
On April 22, Truist Financial raised its price recommendation on D.R. Horton, Inc. (NYSE:DHI) to $150 from $140. It reiterated a Hold rating after the company reported a Q2 earnings beat. The analyst said new orders rose 11%, matching the growth in community count during the quarter. The comparison was easier than usual, but the result still held up well given the broader macro backdrop.
On the same day, RBC Capital Markets raised its price target on DHI to $123 from $117 and maintained an Underperform rating. The firm pointed to the Q2 earnings beat and stronger-than-expected Q3 guidance. At the same time, the analyst said risks remain around volume and margin pressure as the year moves forward, with some uncertainty still tied to 2027. RBC also noted it would fade the rally, citing the stock’s elevated valuation.
D.R. Horton, Inc. (NYSE:DHI) is a homebuilding company focused on acquiring and developing land, along with constructing and selling residential homes. It operates in more than 126 markets across 36 states. Its segments include Homebuilding, Rental, Forestar, Financial Services, and Other.
7. International Business Machines Corporation (NYSE:IBM)
Ex-Dividend Date: May 8
On April 23, BMO Capital Markets lowered its price recommendation on International Business Machines Corporation (NYSE:IBM) to $270 from $290. It reiterated a Market Perform rating. The analyst said Q1 software organic growth came in below expectations, even with stronger performance at Red Hat. The firm added that it still finds it difficult to justify a premium software multiple at the company’s current organic growth level.
On the same day, Wedbush Securities analyst Daniel Ives lowered the price target on Outperform-rated IBM to $320 from $340. The change reflects a lower multiple tied to $600M of Confluent dilution and some near-term softness in consulting. The firm noted that IBM still reported Q1 results with beats on both revenue and earnings. It also maintained its FY26 outlook for revenue and free cash flow, taking what it described as a prudent approach amid macro headwinds, while seeing stronger demand for AI within software services.
International Business Machines Corporation (NYSE:IBM) provides hybrid cloud and artificial intelligence, along with consulting services. Its business is organized across Software, Consulting, Infrastructure, and Financing segments.
6. The Charles Schwab Corporation (NYSE:SCHW)
Ex-Dividend Date: May 8
On April 20, Argus Research lowered its price recommendation on The Charles Schwab Corporation (NYSE:SCHW) to $108 from $117. It reiterated a Buy rating on the shares. The update came following the company’s Q1 results last week. Revenue increased 16%, with growth coming from most major segments. Net interest margin also moved higher, and total client assets reached $11.8T. The firm noted that Schwab is still positioned to grow faster than its peers over the medium term, pointing to its product lineup and steady market share gains.
On April 17, Morgan Stanley analyst Michael Cyprys lowered the price target on Charles Schwab to $125 from $135 and maintained an Overweight rating. The analyst said the Q1 report “reinforced what we see as an increasingly differentiated earnings/growth story within our Brokers coverage.” After the results, the firm raised its FY26 and FY27 EPS estimates by 3.6% and 4.7%, respectively, while trimming the price target.
The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company. Through its subsidiaries, it operates across wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.
While we acknowledge the potential of SCHW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SCHW and that has 100x upside potential, check out our report about the cheapest AI stock.
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