10 Innovative Dividend Stocks to Buy Right Now

In this article, we will take a look at the 10 Innovative Dividend Stocks to Buy Right Now. 

According to a report by CMC Markets, research continues to show that stocks of innovative companies tend to outperform those of less innovative peers. Data from GlobalData highlights this trend. Its Innovation Indices have delivered an annualised alpha of 3–8%. This aligns with findings from Boston Consulting Group, which show that innovative firms have a 2.2x higher future earning potential.

The effect is more visible in areas like artificial intelligence. GlobalData’s AI Innovation Index has outperformed the S&P 500 with an 8.5% annualised alpha. Long-term data support the same pattern. GlobalData indices have shown stronger performance for innovative companies over 1, 3, and 5-year periods. Studies from McKinsey & Company also point in the same direction, and found that the most innovative companies delivered shareholder returns well above industry medians between 2012 and 2022.

BCG’s 2023 report showed that the top 50 innovative companies outperformed the MSCI World Index by an average of 3.3 percentage points per year. BCG’s research also points to a shift in how companies approach growth. A group of forward-looking firms is placing innovation at the center of strategy. These companies are increasing spending on incremental improvements while also allocating about one-third of their investment to breakthrough innovations. They are using a range of tools to strengthen innovation capabilities. This includes active M&A strategies aimed at acquiring new technologies and talent.

When evaluating a company, these actions often point to a forward-looking growth strategy. They can also serve as indicators of an innovation-focused business.

Given this, we will take a look at some of the best dividend stocks from innovative companies.

Our Methodology

For this list, we screened for companies that actively prioritize and promote the development of new and groundbreaking ideas, products, services, or business processes. From there, we picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.

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. Hewlett Packard Enterprise Company (NYSE:HPE)

Number of Hedge Fund Holders: 56

On April 27, Bank of America raised its price recommendation on Hewlett Packard Enterprise Company (NYSE:HPE) to $38 from $32. It reiterated a Buy rating on the shares.  The analyst pointed to the next phase of AI shifting toward agentic systems. In that context, both Dell Technologies and HPE are expected to see stronger demand for AI servers and storage. At the same time, the traditional server business remains important. The analyst noted that higher valuation multiples are being applied to both companies, reflecting expected upside from demand across AI infrastructure and conventional compute.

HPE is recognized as one of the three key innovators behind the invention of inkjet printers, a major step forward in printing technology. The company introduced the first programmable pocket calculator. It also contributed to the development of the atomic clock, which can align global time with precision down to one-millionth of a second.

Hewlett Packard Enterprise Company operates as a global technology provider focused on intelligent solutions. Its platforms help customers capture, analyze, and act on data from edge to cloud. The customer base ranges from small and medium-sized businesses to large enterprises and government organizations.

9. 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 62

On April 22, RBC Capital Markets analyst Deane Dray lowered the firm’s price target on 3M Company (NYSE:MMM) to $133 from $134 and kept an Underperform rating on the shares. The analyst said the company delivered a modest and low-quality Q1 operating beat. He pointed to FX tailwinds and higher-than-expected corporate income as key drivers. He also noted that customer pre-buying ahead of price increases, aimed at offsetting oil-related inflation, contributed to double-digit order growth, the analyst tells investors in a research note. RBC added that operational excellence metrics continue to improve. The firm also highlighted a pipeline of new product launches.

3M Company is widely known for inventing Post-it Notes. They are now used across offices, classrooms, and homes around the world. The company introduced Scotch tape in 1930. It was originally designed to seal cellophane food wrappers. Over time, the product gained widespread use. It became a common tool for everyday tasks, from gift wrapping to basic household fixes.

3M Company operates as a diversified technology company. It manufactures and markets a wide range of products and services. Its segments include Safety and Industrial, Transportation and Electronics, and Consumer.

8. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 63

On April 28, International Business Machines Corporation (NYSE:IBM) launched IBM Bob, an AI-powered development tool designed to support the full software lifecycle, from planning to deployment. The report notes that while AI is speeding up development, enterprises still face challenges tied to complexity, legacy systems, and compliance risks.

Bob is designed to address these issues by combining AI automation with built-in governance, security, and human oversight. It uses multiple AI models to handle tasks more efficiently. In one example, a 30-day task was completed in just 3 days. IBM said the tool is already widely used internally, with over 80,000 employees. The company reported productivity gains of around 45%, with even higher savings on certain tasks.

IBM first gained attention for its punch card machines. Later, it adapted to the rise of digital computers as they became standard across the industry. Over time, it expanded into software, computer memory, databases, and personal computing. More recently, it has focused on cognitive computing. These developments helped shape several large-scale businesses.

International Business Machines Corporation provides hybrid cloud and artificial intelligence solutions, along with consulting services. Its segments include Software, Consulting, Infrastructure, and Financing.

7. Texas Instruments Incorporated (NASDAQ:TXN)

Number of Hedge Fund Holders: 78

During the Q1 2026 earnings call, Texas Instruments Incorporated (NASDAQ:TXN)’s CFO, Rafael Lizardi, said the company expects Q2 revenue to come in between $5 billion and $5.4 billion. EPS is projected in the range of $1.77 to $2.05. He also indicated that the effective tax rate is expected to be around 13% for the quarter.

Management signaled a cautious tone despite strong demand indicators. CEO Haviv Ilan described 2025 as a head fake and a false start. He said the company plans to take a quarter-by-quarter approach. On pricing, Ilan said conditions in Q1 were stable and flat. He expects a similar trend in Q2 and also suggested that prices could increase in the second half of the year, while emphasizing that the durability of demand remains uncertain.

In 1954, TXN developed the first commercial silicon transistor. This marked a major step that helped reshape the electronics industry. It was also among the pioneers in integrated circuit technology, commonly known as microchips. These advances made devices smaller and supported progress in computing and communication. In 1967, the company introduced the TI-2500, the first handheld electronic calculator.

Texas Instruments Incorporated is a global semiconductor company that designs, manufactures, tests, and sells analog and embedded processing chips. Its products serve markets such as industrial, automotive, personal electronics, communications equipment, and enterprise systems.

6. Honeywell International Inc. (NASDAQ:HON)

Number of Hedge Fund Holders: 79

On April 26, Jefferies lowered its price recommendation on Honeywell International Inc. (NASDAQ:HON) to $240 from $245. It reiterated a Hold rating on the shares. The firm said the Middle East war hurt the company’s sales in Q1.

On April 24, Barclays lowered its price goal on Honeywell to $243 from $255. It maintained an Overweight rating following the Q1 report. The firm said the company’s aerospace unit “has some work to do to win over the investment community.”

One of the company’s key innovations is the thermostatic expansion valve (TXV). This component is used in air conditioning and refrigeration systems. It regulates the flow of refrigerant and helps maintain proper temperature and pressure. That improves the overall efficiency of cooling systems.

Honeywell International Inc. operates as an integrated company serving a wide range of industries and regions. Its portfolio is supported by the Honeywell Accelerator operating system and the Honeywell Forge platform.

5. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 81

On April 28, Morgan Stanley reiterated an Equal Weight rating on Pfizer Inc. (NYSE:PFE). It also set a $28 price target on the stock. The firm said that Pfizer has reached a settlement with all three Vyndamax generic filers. The agreement extends U.S. exclusivity for Vyndamax to June 1, 2031. The firm said that, based on recent conversations, this outcome sits at the lower end of investor expectations of 2031/2032. The analyst added that the settlement suggests the polymorph patent, which expires in 2035, is “likely not very strong.”

Pfizer developed a form of santonin used to treat intestinal worms. The treatment gained popularity due to its effectiveness. One of its founders, Erhart, used his background in candy-making to add an almond-toffee flavor, which made the medicine easier to take. Around the same time, the company began producing citric acid, an ingredient used in beverages like Coca-Cola. This product became a core part of the business and supported growth over the following decades.

Pfizer Inc. is a research-based global biopharmaceutical company. It focuses on the discovery, development, manufacture, marketing, sale, and distribution of biopharmaceutical products worldwide.

4. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 86

On April 29, ProPetro Holding Corp. said its PROPWR unit has entered into a strategic framework agreement with Caterpillar Inc. (NYSE:CAT). The deal covers up to 2.1 gigawatts of power generation assets. The goal is to meet growing energy demand from data centers, oil and gas operations, and industrial users, with a focus on efficiency and reliability.

Under the agreement, PROPWR will purchase at least 1.5 GW of additional power generation assets. There is also an option to increase that figure to around 2.1 GW over the next five years. Including the roughly 550 megawatts already ordered, PROPWR is expected to reach about 2.6 GW of capacity by the end of 2031. Full deployment is planned for 2032.

In the early 1900s, Caterpillar introduced the first practical track-type tractor, known as a crawler. It changed how construction and earthmoving work was done, especially on rough terrain where traction mattered. The company is often viewed as one of the more innovative dividend-paying names.

Caterpillar Inc. manufactures construction and mining equipment, along with off-highway diesel and natural gas engines. It also produces industrial gas turbines and diesel-electric locomotives. Its business is organized into Construction Industries, Resource Industries, and Power & Energy.

3. Oracle Corporation (NYSE:ORCL)

Number of Hedge Fund Holders: 111

On April 28, Wedbush Securities analyst Daniel Ives reiterated an Outperform rating on Oracle Corporation (NYSE:ORCL) with a $225 price target. The analyst said that the selloff in ORCL shares was a “way overreaction.” The move followed a Wall Street Journal report that OpenAI recently missed its own targets for new users and revenue. Wedbush said OpenAI continues to see “very high demand” across both consumer and enterprise markets. The firm said it “strongly” disagrees with the idea that growth is weakening. Oracle’s backlog stands at $553B. A large portion of that comes from a $300B cloud contract with OpenAI over the next five years. That project is expected to contribute about $30B in revenue, the analyst said in a research note. Wedbush also expressed confidence in Oracle’s ability to complete its $50B capital raise. The firm said concerns around OpenAI are overblown and added that the company has enough capital to meet its compute capacity needs for at least the next three years. Wedbush maintains an Outperform rating on Oracle with a $225 price target.

Oracle introduced the world’s first autonomous database. This marked an important step in how data is managed. It also offers a broad range of AI-driven cloud applications across the industry. In addition, Oracle supports the largest electronic health record implementation globally, serving more than 9.5 million beneficiaries across the United States, Europe, and the Asia Pacific.

Oracle Corporation provides integrated application suites along with secure, autonomous infrastructure through Oracle Cloud. The business operates across three segments: cloud and license, hardware, and service.

2. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 169

UBS expects strong earnings from Apple Inc. (NASDAQ:AAPL)  as the company continues to roll out personal devices that remain popular with consumers, even as memory supply remains tight. On April 28, the firm raised its price target on the shares to $287 from $280.The change came two days before Apple reports its fiscal second-quarter results. “Supply chain strength and sustained demand/share gains for the iPhone 17 series should lift iPhone revenue up ~20% YoY,” analyst David Vogt said in a note to clients.

The analyst also expects “solid demand in the US and China leading to ~6% revenue growth or $47.4B vs our prior $43.5B [estimate]” for the June quarter. He said UBS has raised its forecast for iPhone unit sales to 50.3 million from 46.5 million, pointing to memory-driven share gains. Apple uses random-access memory (RAM) to power its devices, including the recently launched iPhone 17 and MacBook Neo. These higher-power memory components have become harder to source as demand rises with the expansion of artificial intelligence. UBS said Apple is starting to work through the supply chain constraints.

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. It also offers a range of related services. Its product categories include iPhone, Mac, iPad, and Wearables, Home and Accessories.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 312

On April 28, BMO Capital Markets lowered its price recommendation on Microsoft Corporation (NASDAQ:MSFT) to $505 from $575. It reiterated an Outperform rating ahead of the company’s Q1 results. The firm pointed to ongoing investor concerns around software. It said the March quarter is likely to deliver only modest upside and may not act as a “liberating event.” The analyst also noted that FY27 consensus capex estimates may be “too low,” according to a research note. BMO said the price target reduction is also tied to compression in software valuations.

Microsoft developed Microsoft Windows, an operating system for personal computers. It was the first to offer a graphical user interface for IBM-compatible PCs and quickly became the leading system in the PC market. Today, nearly 90 percent of personal computers run on some version of Windows. The company continues to focus on innovation and regularly introduces new products. It typically allocates about 13% to 14% of its total revenue to research and development each year.

Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.

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