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.
Photo by Karolina Grabowska: https://www.pexels.com/photo/hands-holding-us-dollar-bills-4968630/
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.
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 63
International Business Machines Corporation (NYSE:IBM), commonly known as Big Blue, is an American multinational tech company. Its transformation over the years has been impressive. With a history of more than a century and roots as a pioneer in personal computers, the company is now making important advances in generative artificial intelligence. Its AI platform, watsonx, allows businesses to turn experimental projects into practical solutions. By offering tools such as AI assistants, data platforms, data services, and hybrid cloud applications, it helps developers build and deploy AI more efficiently.
The most significant milestone, however, may still be ahead. International Business Machines Corporation (NYSE:IBM) expects to achieve quantum advantage by the end of 2026, the point at which quantum computers can solve real-world problems faster than classical systems. This would mark the start of a new chapter in computing.
International Business Machines Corporation (NYSE:IBM) is popular among income investors because of the company’s solid dividend history. The company offers a quarterly dividend of $1.68 per share and has a dividend yield of 2.52%, as recorded on September 21. It is among the best dividend stocks because the company holds a 30-year track record of dividend growth.
7. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 66
Starbucks Corporation (NASDAQ:SBUX) is an American multinational chain of coffeehouses and roastery reserves. The company is widely regarded as one of the strongest consumer brands in the world, with operations spanning 88 markets. It has long set the standard in the industry through its premium offerings.
Right now, Starbucks Corporation (NASDAQ:SBUX) is in the midst of a major turnaround strategy. A key focus for CEO Brian Niccol is supporting store employees, known as “green apron partners,” so they can perform their roles more effectively. Through an effort called Green Apron Service, the company is placing greater emphasis on enhancing the customer experience across its stores.
Other steps taken by leadership include simplifying the menu, upgrading stores to restore the sense of Starbucks Corporation (NASDAQ:SBUX) as a “third place,” and moving away from discounts and promotions. Niccol noted that significant progress has been made to strengthen the company’s operating foundation and that, in his view, the turnaround is running ahead of schedule.
Starbucks Corporation (NASDAQ:SBUX)’s dividend history also makes it appealing for income investors. The company has been rewarding shareholders with growing dividends for the past 14 consecutive years, which makes it one of the best dividend stocks. Its quarterly dividend comes in at $0.61 per share and has a dividend yield of 2.89%, as of September 21.
6. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 67
Honeywell International Inc. (NASDAQ:HON) is a diversified conglomerate with operations spanning aerospace, commercial buildings, data centers, energy, and healthcare. The company has a global footprint, with 750 sites spread across about 80 countries.
By the close of 2026, Honeywell International Inc. (NASDAQ:HON) could look very different if its plans move forward. The company has revealed intentions to follow a path similar to General Electric, planning to split into three independent businesses focused on advanced materials, aerospace, and automation.
Honeywell International Inc. (NASDAQ:HON) is a solid dividend company, growing its dividends 15 times over the last 14 consecutive years. According to its 2025 proxy statement, the company has directed $14.6 billion toward mergers and acquisitions, capital projects, share buybacks, and dividend payments, all aimed at enhancing its portfolio and increasing shareholder value. Currently, it offers a quarterly dividend of $1.13 per share and has a dividend yield of 2.16%, as of September 21.
5. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 75
Wells Fargo & Company (NYSE:WFC) ranks among the largest US banks by assets, with around $1.9 trillion in assets under management as of the second quarter of 2025. Its offerings range from bank accounts and credit cards to home, auto, and personal loans, along with investment and wealth management services.
Wells Fargo & Company (NYSE:WFC) continues to hold a prominent position in the financial industry, operating across consumer banking, corporate and investment banking, as well as wealth and investment management. In recent years, the bank has placed greater focus on advancing its digital platforms and broadening its offerings for retail customers. Its foundation rests on solid regulatory compliance, careful capital and liquidity management, and continuous investment in technology.
Wells Fargo & Company (NYSE:WFC) is one of the best dividend stocks, as the company has been making regular payments to shareholders since 1988. The company currently offers a quarterly dividend of $0.45 per share, having raised it by 12.5% in July. The stock supports a dividend yield of 2.13%, as of September 21.
4. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 79
Analog Devices, Inc. (NASDAQ:ADI) is a leading player in the semiconductor sector, developing products tailored to a wide range of market demands. Its main focus lies in researching, designing, and producing high-performance analog, mixed-signal, and digital signal processing integrated circuits, which are essential for capturing and processing real-world data in electronic systems.
Analog Devices, Inc. (NASDAQ:ADI) has emphasized new product introductions and strategic collaborations, with initiatives such as the CodeFusion Studio and the ADI Assure Trusted Edge Security Architecture. These efforts are aimed at strengthening its technological edge, delivering better solutions for customers, and creating value for shareholders through dividends and share repurchases, highlighted by a recent 8% dividend increase and a $10 billion buyback program.
Analog Devices, Inc. (NASDAQ:ADI) is one of the best dividend stocks to invest in, with 21 consecutive years of dividend growth under its belt. The company’s quarterly dividend comes in at $0.99 per share and has a dividend yield of 1.61%, as of September 21.
3. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 84
The Coca-Cola Company (NYSE:KO) is a US-based multinational beverage giant with a vast portfolio of products and operations spanning more than 200 countries and territories. The company has been a household name for generations and is likely to remain relevant well into the future. Its enduring strength largely comes from its powerful brand, which resonates with consumers worldwide. Effective marketing plays a role in this, but equally important is the consistency of a product that people genuinely enjoy.
This strong brand recognition gives The Coca-Cola Company (NYSE:KO) significant pricing power. In the second quarter of 2025, which ended June 27, sales saw a 5% boost from higher pricing. While product volumes may not increase dramatically year after year, the company’s ability to steadily raise prices reflects the enduring value of its brand.
The Coca-Cola Company (NYSE:KO) is a popular stock among income investors. The company currently pays a quarterly dividend of $0.51 per share and has a dividend yield of 3.07%, as of September 21. KO maintains a 63-year streak of dividend growth.
2. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 88
Exxon Mobil Corporation (NYSE:XOM), one of the world’s largest oil companies, is a fully integrated supermajor with operations spanning the entire energy value chain. Its activities cover exploration and production, midstream operations, petrochemicals, refining, and the marketing of petroleum products to consumers.
In recent years, Exxon Mobil Corporation (NYSE:XOM) has concentrated on cutting costs and improving efficiency, and those efforts are starting to deliver results. By prioritizing its most profitable assets and capitalizing on its vast scale, ExxonMobil has been able to lower oil production costs and generate substantial cash flow when crude prices rise.
This strong cash generation supports Exxon Mobil Corporation (NYSE:XOM)’s dividend and reinforces its standing as a Dividend Aristocrat. While the shift toward renewable energy has led some investors to shy away from oil stocks, ExxonMobil is also investing in lower-carbon solutions such as carbon capture, storage, and biofuels, which could help it remain a key energy supplier well into the future.
Exxon Mobil Corporation (NYSE:XOM) has increased its dividends for 42 years in a row, which makes it one of the best dividend stocks to invest in. The company currently pays a quarterly dividend of $0.99 per share and has a dividend yield of 3.51%, as recorded on September 21.
1. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders: 106
S&P Global Inc. (NYSE:SPGI) is a leading credit rating agency that plays a vital role in global financial markets by assessing the creditworthiness of debt issuers. It provides opinions on credit risk and on the ability and willingness of borrowers to meet their financial commitments. Investors depend on these assessments to better evaluate and manage risk.
Holding about 50% of the credit ratings market, S&P Global Inc. (NYSE:SPGI) benefits from a strong competitive edge given how essential credit ratings are to the global economy. Backed by a stable, diversified business model and a healthy balance sheet, the company has raised its dividend for 53 straight years and is well positioned to continue that record.
On September 16, S&P Global Inc. (NYSE:SPGI) declared a quarterly dividend of $0.96 per share, which was in line with its previous dividend. The stock has a dividend yield of 0.76%, as recorded on September 21.
While we acknowledge the potential of SPGI to grow, 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 SPGI and that has 100x upside potential, check out our report about this cheapest AI stock.
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