In this article, we will take a look at some of the best dividend stocks for passive income.
In 2025, side hustles are becoming increasingly popular, with more people taking on extra work alongside their main jobs to boost their income or explore turning their passions into full-time ventures.
A report by Hostinger revealed that over 36% of Americans now have a side gig, earning an average of $530 per month. Gen Z, in particular, is leading this trend. Globally, the side hustle economy was valued at $556.7 billion in 2024. In March 2025 alone, the US recorded 452,255 new business applications, which was a 6.4% rise from the previous month. With 55% of full-time employees expressing interest in transforming their hobbies into businesses, this uptick points to a growing shift toward formalizing side hustles into entrepreneurial ventures.
The report also mentioned that affiliate marketing is becoming an increasingly popular choice for passive income, with the industry now worth $18.5 billion. Recent statistics show that more than 80% of businesses have integrated affiliate marketing into their digital marketing strategies.
Dividends remain one of the most reliable and well-established methods for generating passive income. Investing in Dividend Aristocrats— companies that have consistently increased their dividend payments for 25 straight years— is widely viewed as a dependable strategy for earning steady returns. Given this, we will take a look at some of the best dividend stocks for passive income.
Our Methodology
For this article, we scanned Insider Monkey’s database of 1,000 hedge funds as of Q1 2025 and selected stocks with strong dividend policies, sound financials, and dividend growth histories. These stocks have a minimum of 2% yield, as of July 10. The stocks are then ranked according to hedge funds having stakes in them.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 31
Enterprise Products Partners L.P. (NYSE:EPD) is one of the best dividend stocks for passive income due to its dividend growth and high yield. On July 9, the company declared a 2% hike in its quarterly dividend to $0.545 per share. Through this increase, the company stretched its dividend growth streak to 29 years.
In the first quarter of 2025, Enterprise Products Partners L.P. (NYSE:EPD) reported distributable cash flow (DCF) of $2.0 billion in the first quarter of 2025, marking a 5% rise from the $1.9 billion it posted in the same period last year. DCF covered the distribution 1.7 times over for the recent quarter, allowing the company to retain $842 million in cash flow. Its adjusted cash flow from operations (CFFO) came in at $2.1 billion for the first quarter of both 2025 and 2024. For the twelve-month period ending March 31, 2025, adjusted CFFO totaled $8.6 billion. During that same period, the company’s payout ratio— which includes distributions to common unitholders and share buybacks— stood at 56% of adjusted CFFO.
In addition to dividend growth, Enterprise Products Partners L.P. (NYSE:EPD) also offers a solid dividend yield, which stands at 6.71%, as of July 10. The company ranks among the largest publicly traded partnerships and is a key midstream energy provider in North America, offering essential services to both producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals.
9. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 32
Realty Income Corporation (NYSE:O) is an American real estate investment trust company. It is among the best dividend stocks for passive income as the company distributes its payouts monthly. On July 8, the company declared a monthly dividend of $0.269 per share, which fell in line with its previous dividend. Overall, it has raised its payouts 131 times since its inception three decades ago. Moreover, the company has paid 661 consecutive monthly dividends to shareholders. The stock has a dividend yield of 5.67%, as of July 10.
Realty Income Corporation (NYSE:O) generates stable and reliable rental income from a diverse portfolio that includes retail, industrial, gaming, and data center properties. Over 90% of its rental revenue comes from sectors that tend to be resilient during economic downturns or less impacted by the rise of e-commerce. The company typically leases its properties to financially sound tenants on a net lease basis through long-term contracts that often include annual rent escalations, helping to drive steady income growth.
As of mid-2025, Realty Income Corporation (NYSE:O) maintains a prudent dividend payout ratio below 75% and has one of the strongest balance sheets in the REIT sector, with a leverage ratio of 5.4x. This solid financial footing enables the company to continue expanding its portfolio with income-producing assets.
8. Kimberly-Clark Corporation (NASDAQ:KMB)
Number of Hedge Fund Holders: 45
Kimberly-Clark Corporation (NASDAQ:KMB) stands out as a strong income stock, having increased its dividend every year for 53 straight years, a track record that places it among the elite group of Dividend Kings. While past performance doesn’t guarantee future increases, this consistent history reflects the company’s dedication to rewarding shareholders. With a payout ratio of approximately 67%, the company appears to have enough financial flexibility to continue boosting its dividend in the years ahead.
Kimberly-Clark Corporation (NASDAQ:KMB)’s cash position remained strong in the first quarter of 2025. The company reported an operating cash flow of $327 million, and its capital spending came in at $204 million. It remained committed to its shareholder value, returning $466 million to investors through dividends and share repurchases.
Kimberly-Clark Corporation (NASDAQ:KMB) currently offers a quarterly dividend of $1.26 per share and has a dividend yield of 3.83%, as of July 10. The Texas-based consumer goods company is best known for its well-established brands such as Huggies, Kleenex, and Kotex. The company focuses on essential personal care and household products and operates across international markets.
