In this article, we will take a look at some of the best S&P 500 dividend stocks.
Companies that pay dividends have long attracted investor interest, as these payouts signal financial stability and management’s confidence in maintaining and even raising distributions over time. In today’s market, where the focus is on quality and steady cash flows, dividends serve as a reassuring indicator of strength. According to Global X, 403 companies, representing about 79% of the S&P 500 Index by weight, currently distribute dividends.
The report also noted that, over the past two decades, firms announcing their first-ever dividend outperformed the S&P 500 by an average of 0.8% in the week after the announcement and by 8.4% over the following year. More recently, companies initiating dividends in 2022 and 2023 delivered the strongest one-year excess returns since the early 2000s, highlighting investors’ preference for reliable cash flows and solid balance sheets. By contrast, during the run-up to the dot-com bubble, the market placed greater value on reinvestment and growth rather than dividend commitments.
Given this, we will take a look at some of the best dividend stocks in the S&P 500.
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Our Methodology
For this list, we scanned the list of companies in the broader market and picked dividend stocks with dividend yields of at least 1%, as of September 21. From that list, we picked 10 prominent dividend stocks with the highest number of hedge fund investors, according to Insider Monkey’s database of nearly 1,000 hedge funds, as of Q422025. The stocks are ranked in ascending order of the number of 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. Garmin Ltd. (NYSE:GRMN)
Number of Hedge Fund Holders: 40
Garmin Ltd. (NYSE:GRMN) is an American multinational tech company. Its strategy leans heavily on diversification, enabling the company to reduce dependence on any single market by spreading risks across multiple sectors. This way, it secures revenue from a wide range of products, from fitness trackers to sophisticated automotive navigation systems.
At the same time, innovation drives Garmin Ltd. (NYSE:GRMN)’s growth, supported by substantial spending on Research and Development. Its vertically integrated manufacturing setup allows the company to introduce new products quickly while keeping quality standards high. In addition, the company protects its technological edge through a strong intellectual property portfolio, holding more than 1,900 patents worldwide.
Garmin Ltd. (NYSE:GRMN) currently offers a quarterly dividend of $0.90 per share, having raised it by 20% in June. Through this increase, the company stretched its dividend growth streak to 23 years, which makes it one of the best dividend stocks to invest in. The stock has a dividend yield of 1.53%, as of September 21.
9. Tractor Supply Company (NASDAQ:TSCO)
Number of Hedge Fund Holders: 41
Tractor Supply Company (NASDAQ:TSCO) stands as the largest rural lifestyle retailer in the US, catering to the daily needs of hobby farmers, ranchers, pet owners, and homeowners. A key strength for investors is its focus on high-frequency categories such as pet food and animal feed, essentials that bring customers back on a regular basis.
Tractor Supply Company (NASDAQ:TSCO)’s performance has been improving, creating an attractive entry point into a business that demonstrates consistent resilience year after year. There are several positives at play: same-store sales are on the rise, management is forecasting an even stronger second half, and the dividend still has ample room for growth. Coupled with a fair valuation for such a steady operator, the stock offers a favorable risk-reward balance.
In addition, Tractor Supply Company (NASDAQ:TSCO) is a solid dividend company, having raised its payouts for 16 consecutive years. The company offers a quarterly dividend of $0.23 per share and has a dividend yield of 1.54%, as recorded on September 21.
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