In this article, we will take a look at some of the best dividend stocks for 2025.
Over the past two years, dividend stocks have lagged behind the broader market as investor interest shifted toward companies focused on artificial intelligence. However, seasoned investors continue to see long-term value in dividend-paying stocks, given their strong track record over time. Temporary market trends have not diminished their significance. In fact, dividends have historically been a major contributor to total returns, making up around 31% of the market’s monthly total return from 1926 through February 2025, according to data from S&P Dow Jones Indices.
Dividend stocks have also shown greater stability during market downturns. Historical data shows that the S&P Dividend Aristocrats have provided better risk-adjusted returns than the overall market, with less volatility. These stocks have offered effective downside protection, outperforming the market in roughly two-thirds of the market’s down months and about 44% of its up months. Analysts continue to view dividend equities positively for the current year, citing strong historical performance.
A recent J.P. Morgan report noted that global equity markets may be entering a robust period of dividend growth. This is expected to be driven not only by a cyclical recovery in payouts but also by continued structural momentum. While global dividends per share have increased at an average rate of 5.6% annually over the past 20 years, forecasts now suggest this growth could accelerate to 7.6% in the years ahead. Given this, we will take a look at some of the best dividend stocks to invest in.
Our Methodology:
To compile this list, we thoroughly reviewed reputable sources such as Forbes, Morningstar, Barron’s, and Business Insider. From their latest articles, we gathered the stocks they collectively favored. Additionally, we assessed the sentiment of hedge funds for each stock using Insider Monkey’s Q1 2025 database. The stocks are arranged in ascending order based on the number of hedge funds that hold stakes in these companies.
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. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 68
Lowe’s Companies, Inc. (NYSE:LOW) is one of the best dividend stocks for 2025. The company stands out as a strong dividend stock, offering both steady growth and long-term reliability. Its current yield of 2.17% is backed by a solid track record, with dividends growing at an average annual rate of 15.9% over the past five years. A relatively low payout ratio of 36.7% gives the company room to raise dividends further without straining its finances.
Lowe’s Companies, Inc. (NYSE:LOW) has been rewarding shareholders with growing dividends for the past 60 years and has paid regular dividends since 1961. The company currently offers a quarterly dividend of $1.20 per share.
Lowe’s Companies, Inc. (NYSE:LOW)’s competitive edge comes from its well-established brand, strong logistics network, and effective omnichannel strategy, all of which help reinforce its position as a market leader. With sound operations and a disciplined financial approach, Lowe’s appears well-positioned to continue delivering dividend growth in the years ahead.
9. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 69
Texas Instruments Incorporated (NASDAQ:TXN) is among the best dividend stocks to buy in 2025. The company follows a strong business model centered on analog and embedded processing products, supported by its long-lasting competitive strengths.
Another key part of its strategy to drive long-term growth in free cash flow per share is its disciplined approach to capital allocation. This includes careful selection of research and development projects, building new capabilities, investing in manufacturing capacity, evaluating potential acquisitions, and returning capital to shareholders.
Texas Instruments Incorporated (NASDAQ:TXN)’s strategy also focuses on efficiency, which it defines as consistently aiming to generate greater results for every dollar spent. This approach emphasizes directing investments toward the most impactful areas to support the long-term growth of free cash flow per share, rather than simply cutting costs to the bare minimum. For shareholders, this commitment to efficiency is expected to support revenue growth, stronger gross margins, careful management of R&D and SG&A expenses, healthy free cash flow margins, and ultimately, an increase in free cash flow per share.
Texas Instruments Incorporated (NASDAQ:TXN) currently offers a quarterly dividend of $1.36 per share. Overall, the company has raised its payouts for 21 consecutive years. In the past five years, it has raised its payouts at an annual average rate of over 9%, which is considered a solid pace in the tech sector. As of June 25, TXN has a dividend yield of 2.65%.
8. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 75
American Express Company (NYSE:AXP) is a leading financial company that earns revenue by processing payments and issuing its own credit cards. It collects fees from both transactions and cardholders. As of June 25, the stock offers a dividend yield of 1.06%, which is below the market average, a sign that the stock has seen a strong price increase. Over the past year, it has delivered nearly a 34% return to shareholders, and the low yield suggests the stock is relatively expensive.
Still, American Express Company (NYSE:AXP)’s dividend outlook remains strong. While it doesn’t raise its dividend every year, Amex has consistently either increased or maintained its payouts for decades, regardless of market conditions. In January, it announced a 17% boost to its quarterly dividend, the largest in over ten years. The company currently offers a quarterly dividend of $0.82 per share.
While some banks have reduced or halted dividends during downturns, American Express Company (NYSE:AXP) has continued rewarding shareholders. This resilience reflects its conservative lending practices and focus on higher-income customers, who are less likely to default in tough economic times.
7. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 75
NextEra Energy, Inc. (NYSE:NEE) is one of the best dividend stocks to buy in 2025. The company benefits from a strong two-part business model. Its regulated utility arm, Florida Power & Light, delivers steady cash flow, while its renewable energy segment, NextEra Energy Resources, supports future growth through clean energy development.
NextEra Energy, Inc. (NYSE:NEE) has increased its dividend for 29 straight years and currently offers a solid 3.22% yield. For income-focused investors, the company provides both the reliability of a utility and strong potential for dividend growth. Its yield stands out compared to many clean energy stocks, and a five-year dividend growth rate of 10.5% reflects management’s commitment to rewarding shareholders. With a payout ratio of 59.7%, the company maintains a healthy balance between reinvesting in growth and sustaining dividends.
Looking ahead, management expects earnings to grow between 6% and 8% annually through at least 2027, supporting continued dividend increases. NextEra Energy, Inc. (NYSE:NEE) currently offers a quarterly dividend of $0.5665 per share.
6. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 81
Chevron Corporation (NYSE:CVX) is among the best dividend stocks for 2025. The company continues to follow a consistent set of financial priorities. These include delivering steady dividend growth to shareholders, making long-term investments, maintaining a strong balance sheet to manage exposure to commodity price fluctuations, and repurchasing shares throughout market cycles.
In 2024, Chevron Corporation (NYSE:CVX) returned $11.8 billion in dividends. Over the past 15 years, its dividend has grown at an average annual rate of 6.2%, which is nearly 12 times higher than the average of its LTIP peer group and approximately three-quarters of the return generated by the S&P Total Return Index. By the end of the year, the company’s dividend yield was nearly three and a half times greater than that of the S&P Total Return Index.
Chevron Corporation (NYSE:CVX) has steadily increased its dividend for 38 consecutive years, even during difficult periods like the financial crisis and the COVID-19 pandemic. This consistent commitment to shareholder returns makes it a strong option for investors seeking reliable passive income. Offering a forward dividend yield of 4.78%, the stock stands out, especially given the company’s careful financial management. Over the past five years, Chevron has maintained an average payout ratio of 68.4%, reflecting a disciplined and sustainable approach to dividends. The company currently offers a quarterly dividend of $1.71 per share.
5. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 82
Cisco Systems, Inc. (NASDAQ:CSCO) is one of the top dividend picks for 2025. The company’s business remains on solid footing. In March, it introduced its Webex AI agent designed for customer service applications, marking progress in its innovation efforts.
Cisco Systems, Inc. (NASDAQ:CSCO) is also effectively managing expenses, with operating costs in fiscal Q3 of 2025 remaining flat compared to the previous year. A slight improvement in gross margin led to a healthy rise in operating income. While the company still generates much of its revenue from established areas like routing and switching, these segments provide a steady cash flow that supports its ongoing business transformation.
Cisco Systems, Inc. (NASDAQ:CSCO) continues to return significant capital to shareholders, backed by strong free cash flow. The stock offers a 2.4% dividend yield and benefits from a newly approved $15 billion share buyback program. In the most recent quarter, the company generated $4.1 billion in operating cash flow, up 2% from the same period last year, and returned $3.1 billion to shareholders through dividends and repurchases.
Cisco Systems, Inc. (NASDAQ:CSCO)’s acquisition strategy also supports its dividend outlook, especially when deals boost cash flow. A notable example is the company’s 2024 acquisition of Splunk, which added about $1.4 billion to fiscal 2024 revenue. It currently offers a quarterly dividend of $0.41 per share.
4. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 87
AT&T Inc. (NYSE:T) is one of the best dividend stocks to buy in 2025. In recent years, the company has moved away from non-core businesses such as DirecTV and Time Warner, refocusing on its core operations in wireless and fiber connectivity. This renewed focus allows the company to better meet growing customer expectations for faster and more dependable service. As a result, profit margins have improved, cash flow has shown consistent growth, and the company has reduced its debt by $45 billion since John Stankey became CEO in July 2020.
Secondly, AT&T Inc. (NYSE:T) typically competes in a limited field, mainly with Verizon and T-Mobile in wireless, and smaller regional players in cable. With few rivals able to match its scale, the company benefits from long-term stability. Its continued investment in fiber strengthens this advantage. As telecom remains essential to daily life, AT&T is well-positioned for lasting success through 2030 and beyond.
In addition, AT&T Inc. (NYSE:T) maintains a solid cash position, providing enough support for its dividend payments. Over the past twelve months, the company generated $40.2 billion in operating cash flow and $14.4 billion in levered free cash flow. Although investors may hope for higher free cash flow to cover capital spending, reduce debt, or raise dividends, the current levels are sufficient to maintain the company’s existing dividend.
AT&T Inc. (NYSE:T) currently offers a quarterly dividend of $0.2775 per share and has a dividend yield of 3.98%, as of June 25.
3. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 93
Merck & Co., Inc. (NYSE:MRK) is a leading pharmaceutical company, best known for its strong presence in oncology, particularly through Keytruda, the top-selling drug globally. Beyond cancer treatment, the company also produces medications for diabetes, as well as vaccines for HPV and chickenpox.
In 2024, Merck & Co., Inc. (NYSE:MRK) expanded its pipeline through several acquisitions, including Harpoon Therapeutics, Abceutics, EyeBio, and Modifi Biosciences. These moves support a promising future for its drug portfolio.
Merck & Co., Inc. (NYSE:MRK)’s pipeline includes dozens of active programs, featuring new drug candidates and recently approved treatments like Winrevair for pulmonary arterial hypertension. The company also holds a strong position in the animal health sector, which benefits from the growing trend in pet ownership.
With 14 consecutive years of dividend increases and an average dividend growth rate of nearly 8% over the past five years, Merck & Co., Inc. (NYSE:MRK) offers a reliable and steadily growing income stream for investors. The company’s quarterly dividend sits at $0.81 per share for a dividend yield of 4.07%, as of June 25.
2. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 129
JPMorgan Chase & Co. (NYSE:JPM) is one of the best dividend stocks to buy in 2025. The company’s strong stock performance over the past five years has been largely fueled by solid financial results. The bank delivered strong earnings in 2024 and maintained that momentum into 2025, despite broader economic headwinds. In the first quarter, total deposits rose 2% year over year, providing low-cost funding to support loan growth. Net interest income edged up by 1%, while non-interest income saw a notable 17% increase.
As of March 31, JPMorgan Chase & Co. (NYSE:JPM) had $3.7 trillion in assets under management. The firm is a dominant force in the financial sector, with operations spanning capital markets, investment banking, asset and wealth management, and consumer banking.
JPMorgan Chase & Co. (NYSE:JPM) also has a strong dividend track record, consistently paying dividends since 2000. Its annual dividend has grown significantly, from $0.20 per share in 2010 to $4.60 in 2024. With a five-year average payout ratio of under 30%, the company maintains robust cash flow, making its dividend payments both sustainable and reliable. Currently, it pays a quarterly dividend of $1.40 per share and has a dividend yield of 1.97%, as of June 25.
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 139
UnitedHealth Group Incorporated (NYSE:UNH) is a major health insurer and one of the best dividend stocks to buy in 2025. The company has faced setbacks this year due to billing concerns and rising costs, pushing its stock to multi-year lows. The stock is down by over 40% in 2025, so far. However, despite near-term challenges, the company remains a strong long-term pick. As a key player in controlling healthcare costs, its current issues are likely temporary and may not impact its future performance.
UnitedHealth Group Incorporated (NYSE:UNH) is a large-scale company, generating over $400 billion in revenue last year and earning $14 billion in profit. With a payout ratio of just 35%, it has plenty of room to keep up regular dividend payments while still reinvesting in the business or handling economic challenges. The company has also increased its dividend every year since 2011, showing a strong commitment to rewarding shareholders.
UnitedHealth Group Incorporated (NYSE:UNH) offers a quarterly dividend of $2.21 per share and has a dividend yield of 2.93%, as of June 25.
While we acknowledge the potential of UNH 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 UNH and that has 100x upside potential, check out our report about this cheapest AI stock.
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