In this article, we will take a look at the 10 Most Profitable Dividend Stocks to Invest In Now.
A strong earnings season and continued optimism around artificial intelligence have helped keep US stocks on a solid footing. Investors are still dealing with market volatility tied to inflation concerns and geopolitical developments, but sentiment has remained largely supportive.
In an interview with BNN Bloomberg on June 8, Brian Szytel, co-chief investment officer at The Bahnsen Group, shared his views on market leadership and dividend-focused investing. Szytel said his firm follows a dividend-growth approach and tends to focus more on value. He suggested investors should start looking beyond the momentum trades that have dominated the market in recent years.
Markets have now posted double-digit gains for four straight years, he noted. With leadership beginning to broaden, he sees opportunities in areas that have lagged. Consumer staples stood out as one example. Szytel pointed out that the sector now accounts for just 4.6% of the S&P 500. That’s the lowest level on record and even below where it stood in 2000. To him, that creates an opportunity. He said investors can find value in the sector, particularly when paired with the benefit of growing dividend payments. In his view, it offers an attractive way to participate in the market.
Overall, the long-term impact of dividends on investment returns is hard to ignore. A report from Hartford Funds highlighted that, going back to 1960, 85% of the cumulative total return of the broader market can be attributed to reinvested dividends and the power of compounding. The report also noted that looking at average stock performance over a longer time frame provides a more granular perspective. From 1940–2025, dividend income’s contribution to the total return of the S&P 500 Index averaged 33%.
Over the decades, that contribution has not been consistent. The report said dividends played a much larger role during some periods than others, showing how their impact on overall returns has varied across different market environments.
Given this, we will take a look at some of the most profitable stocks that pay dividends.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology:
For this list, we screened for companies that have consistent dividend policies and sound financial positions. From that list, we identified dividend companies with a net profit margin of over 15% as of the most recent quarter. We finally 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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Parker-Hannifin Corporation (NYSE:PH)
Net Profit Margin: 16.58%
Citi opened a “90-day upside catalyst watch” on Parker-Hannifin Corporation (NYSE:PH) on June 8. The firm reiterated its Buy rating and $1,141 price target on the stock. It said it remains optimistic ahead of the company’s fiscal Q4 results, pointing to confidence in Parker-Hannifin’s ability to deliver 35% incremental margins through fiscal 2028.
Earlier, on May 26, Wells Fargo analyst Joseph O’Dea reduced the firm’s price target on Parker-Hannifin to $950 from $980 but kept an Overweight rating on the stock. The analyst noted that consensus estimates currently place 2027 EPS at about $34.00. According to Wells Fargo, excluding acquisitions that have not yet closed and applying a conservative tax assumption, the company’s initial guidance midpoint could fall between $33.00 and $33.30 per share. The firm added that with the impact of acquisitions, a lower tax rate, and slightly stronger incremental margins, earnings could eventually exceed $34.50 per share.
Parker-Hannifin Corporation develops motion and control technologies. The company designs, manufactures, and supports highly engineered products and systems through its aftermarket services. It operates through two segments: Diversified Industrial and Aerospace Systems.
9. West Pharmaceutical Services, Inc. (NYSE:WST)
Net Profit Margin: 16.85%
Wolfe Research analyst Mike Polark upgraded West Pharmaceutical Services, Inc. (NYSE:WST) to Outperform from Peer Perform on June 2. He also assigned a $375 price target to the stock. The analyst described the company’s first-quarter performance as “juicy good,” pointing to ongoing GLP1-related growth and a return to meaningful expansion across the rest of the high-value products segment. According to Polark, West remains well-positioned because of its exposure to injectable drugs, a market that continues to grow and is expected to expand for years.
On May 29, Morgan Stanley increased its price recommendation on WST to $325 from $315. It reiterated an Equal Weight rating on the shares. The revision followed investor meetings with members of the company’s management team earlier in the week. After those discussions, the firm said it “sensed strong conviction in both near- and longer-term execution as top-down catalysts play into the company’s strengths,” according to the analyst.
West Pharmaceutical Services, Inc. is a global manufacturer that designs and produces advanced containment and delivery systems for injectable drugs and healthcare products. The company focuses on integrated technologies that support the safe storage and administration of injectable therapies.
8. AT&T Inc. (NYSE:T)
Net Profit Margin: 18.6%
On June 3, Oppenheimer analyst Timothy Horan downgraded AT&T Inc. to Perform from Outperform. The firm said it is becoming more cautious about AT&T’s long-term broadband growth outlook and believes mobile subscriber growth could eventually face pressure as low Earth orbit (LEO) satellite constellations become a more serious competitive threat. Oppenheimer noted that AT&T has greater broadband exposure than its telecom peers, though it remains less exposed than cable providers. AT&T plans to add 7 million new fiber passings this year and roughly 5 million annually after that, to reach more than 60 million locations by 2030. Oppenheimer believes adoption rates may fall short of expectations and suggested the company could ultimately stop expansion at around 50 million homes.
On May 20, AT&T announced a commitment to invest $19 billion in California’s fiber and wireless networks by the end of 2030. The company said the investment is aimed at supporting the high-speed connectivity needed for the next phase of innovation and economic growth across the state.
With updated federal policies supporting network modernization, AT&T said it plans to invest $3 billion more during the 2026-2030 period than it did between 2021 and 2025. That would bring its total network investment in California to $35 billion over the decade from 2021 through 2030.
Alongside the $19 billion commitment, the company said it will continue offering affordable connectivity options, strengthen its workforce across the state, and work with organizations focused on narrowing the digital divide.
AT&T Inc. is a holding company that provides telecommunications and technology services around the world. The company operates through its Communications and Latin America segments.
7. Cisco Systems, Inc. (NASDAQ:CSCO)
Net Profit Margin: 19.69%
On June 8, BofA raised its price recommendation on Cisco Systems, Inc. (NASDAQ:CSCO) to $150 from $135. The firm reiterated a Buy rating on the shares. It also increased its price targets for Arista Networks (ANET), Cisco, and Extreme Networks (EXTR) after hosting several networking-focused sessions at its Global Technology Conference in San Francisco.
During the fiscal Q3 2026 earnings call, Chairman and CEO Charles Robbins said Cisco delivered record revenue of $15.8 billion. It was up 12% from the same quarter a year earlier. He noted that total product orders increased 35% year-over-year, while AI infrastructure orders from hyperscale customers reached $1.9 billion during the quarter. Robbins said strong demand had led the company to expect approximately $9 billion in AI infrastructure orders from hyperscalers in fiscal 2026. He also stated that Cisco expects to recognize around $4 billion in AI infrastructure revenue from those customers during the fiscal year.
He added that the company had introduced a restructuring plan designed to redirect resources toward its most important growth opportunities. According to Robbins, the initiative is meant to support higher levels of investment in areas including silicon, optics, security, and artificial intelligence.
Cisco Systems, Inc. develops and sells a broad range of technologies that help power the internet. The company is bringing together its networking, security, collaboration, applications, and cloud portfolios into a more integrated offering.
6. Amgen Inc. (NASDAQ:AMGN)
Net Profit Margin: 20.96%
On June 5, Goldman Sachs lowered its price recommendation on Amgen Inc. (NASDAQ:AMGN) to $389 from $425. It reiterated a Buy rating on the stock. The firm adjusted its model after Amgen disclosed during its first-quarter earnings report that an IRS audit covering the 2016-2018 period had escalated into a formal dispute. Amgen also received a notice of proposed adjustment indicating that the IRS is seeking changes consistent with prior cases, the analyst noted in a research report.
Earlier, on May 14, Piper Sandler reduced its price goal on Amgen to $427 from $432. It maintained an Overweight rating on the shares. From a broader perspective, the firm still sees potential for revenue growth above consensus expectations in both 2026 and 2027. That outlook is driven less by the company’s established commercial products and more by continued momentum in its rare disease business, particularly Uplizna. Piper Sandler also views Tepezza as a potentially stronger growth driver following encouraging Phase III results for its subcutaneous formulation.
Amgen Inc. is a biotechnology company that discovers, develops, manufactures, and delivers medicines aimed at treating some of the most challenging diseases. The company focuses on areas with significant unmet medical needs and uses its scientific expertise to develop treatments designed to improve patients’ lives.
5. CSX Corporation (NASDAQ:CSX)
Net Profit Margin: 21.55%
On June 5, Susquehanna raised its price recommendation on CSX Corporation (NASDAQ:CSX) to $50 from $44. It reiterated a Neutral rating on the shares. The firm said rail volumes appear to be tracking ahead of expectations. It also pointed to ISM readings that are “encouraging,” with expansion continuing for five consecutive months. According to the analyst, there is no indication that higher fuel prices are weighing on industrial demand. Susquehanna also increased price targets across the rail sector earlier the same day.
On May 19, BofA raised its price goal on CSX to $51 from $49. It maintained a Buy rating after the company’s board approved a $5 billion share repurchase program. The authorization matches the largest buyback in CSX’s history and represents about 6.0% of outstanding shares. The firm said it had already incorporated buyback assumptions into its forecasts and therefore made no changes to its EPS estimates for 2026, 2027, or 2028. Even so, it believes the new authorization creates additional upside potential.
CSX Corporation is a transportation company that provides rail, intermodal, and rail-to-truck transload services and solutions. Its network serves customers across a range of markets, including energy, industrial, construction, agricultural, and consumer products.
4. QUALCOMM Incorporated (NASDAQ:QCOM)
Net Profit Margin: 22.31%
On June 5, JPMorgan raised its price recommendation on QUALCOMM Incorporated (NASDAQ:QCOM) to $265 from $160. It reiterated a Neutral rating on the shares ahead of the company’s investor day scheduled for June 24. The firm expects Qualcomm to outline data center revenue targets of more than $3 billion in fiscal 2027 and $35 billion in fiscal 2031. JPMorgan also placed the stock on “Positive Catalyst Watch,” citing expectations that the targets presented at the investor day could exceed investor expectations. Even so, the firm kept its Neutral rating, saying it wants to see evidence that Qualcomm can execute on those opportunities in what remains an increasingly competitive market.
CNBC highlighted the stock’s strong performance in a May 22 report. Shares have gained nearly 45% since the start of 2026. The report noted that Qualcomm is leveraging its leadership in smartphones to strengthen its position in connected devices, including smart glasses, vehicles, and robots.OpenAI is also reportedly working with Qualcomm on the development of an AI chip that could power a future device operated by AI agents.
The report also pointed to Qualcomm’s agreement with automaker Stellantis. Under the deal, Stellantis will use Snapdragon processors to “support advanced, unified compute power across the entire vehicle, including cockpit, connectivity and advanced driver assist systems.”
QUALCOMM Incorporated develops and commercializes foundational technologies for the wireless industry. Its technologies support third-generation (3G), fourth-generation (4G), and fifth-generation (5G) wireless connectivity, as well as high-performance and low-power computing, including on-device artificial intelligence.
3. McCormick & Company, Incorporated (NYSE:MKC)
Net Profit Margin: 23.20%
On June 2, UBS analyst Peter Grom lowered the price recommendation on McCormick & Company, Incorporated to $51 from $53. He reiterated a Neutral rating on the stock. In a research note, the analyst said the firm updated its expectations across the food sector to reflect current demand trends and inflation pressures.
On May 29, Reuters reported that Toms Capital Investment Management, an activist US hedge fund, had built a significant stake in McCormick, according to sources familiar with the matter. The investment comes as the food company works on a major acquisition deal.
The sources said Toms Capital, led by Benjamin Pass, invested in McCormick during the second quarter after the company announced plans to acquire Unilever’s food business. The sources were not authorized to discuss the matter publicly. The size of Toms Capital’s stake and the actions it may seek to pursue at McCormick could not immediately be determined.
McCormick & Company, Incorporated manufactures, markets, and distributes herbs, spices, seasonings, condiments, and flavors across the food and beverage industry. Its customers include retailers, food manufacturers, and foodservice businesses.
2. Union Pacific Corporation (NYSE:UNP)
Net Profit Margin: 29.2%
On June 5, Susquehanna analyst Harrison Bauer raised the price recommendation on Union Pacific Corporation (NYSE:UNP) to $305 from $290. The analyst reiterated a Positive rating on the shares. The firm said rail volumes appear to be tracking ahead of expectations. According to the analyst, ISM readings have been “encouraging,” with expansion continuing for five consecutive months. The firm also noted there is no indication that higher fuel costs are hurting industrial demand.
During Union Pacific’s Q1 2026 earnings call, CEO Vincenzo Vena said the company got off to a strong start in 2026, delivering record first-quarter results. He noted that Union Pacific posted record operating income and net income during the quarter. Vena pointed to the company’s profitability and operating efficiency, reporting net income of $1.7 billion and earnings per share of $2.87. He also said that, excluding merger-related costs, the operating ratio improved by 80 basis points to 59.9%.
CFO Jennifer Hamann reported that operating revenue increased 3% year over year to $6.2 billion. She added that freight revenue rose 4% to $5.9 billion despite a 1% decline in volume. Hamann also said operating expenses increased 3% to $3.8 billion, driven by inflationary pressures and merger-related activities. She noted that productivity gains helped offset part of those costs. The company achieved record first-quarter workforce productivity, allowing it to operate with a workforce that was 5% smaller than a year earlier.
Union Pacific Corporation, through its principal operating company, Union Pacific Railroad Company, operates a rail network that connects more than 23 states across the western two-thirds of the United States, serving as a key link in the global supply chain.
1. Essex Property Trust, Inc. (NYSE:ESS)
Net Profit Margin: 31.57%
On June 8, Evercore ISI raised its price recommendation on Essex Property Trust, Inc. (NYSE:ESS) to $296 from $295. It reiterated an Outperform rating on the shares. The firm said it updated its targets following last week’s annual NAREIT Conference.
Earlier, on May 15, Scotiabank increased its price goal on ESS to $282 from $278. It maintained an Outperform rating. The analyst said the firm was revising its price targets for the U.S. multifamily REITs under its coverage. Scotiabank expects a more difficult recovery in Sunbelt markets, estimating that it could take several years for those markets to absorb the excess supply created by overbuilding. The firm continues to view Essex Property as one of its preferred multifamily REITs, citing its exposure to Northern California as a key advantage.
Essex Property Trust, Inc. is a self-administered and self-managed real estate investment trust. The company acquires, develops, redevelops, and manages apartment communities in selected residential markets across the West Coast of the United States.
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