In this article, we will take a look at some of the best halal stocks that pay dividends.
Halal stocks are shares in companies that follow Shariah law. These businesses operate within the guidelines of Islamic principles, steering clear of sectors like alcohol, gambling, tobacco, and conventional financial services. They also uphold ethical standards, ensuring their income aligns with Islamic values.
When considering halal investments, it’s essential to examine a company’s financials closely. Firms with debt levels higher than 33% of their market value are generally excluded from halal investing, although this threshold may vary depending on the nature of the business. A report by the World Bank highlights the rapid expansion of the Islamic finance sector over the past ten years, with annual growth estimated between 10 and 12 percent. At present, Shariah-compliant financial assets are worth around $2 trillion and span banks, non-bank financial institutions, capital markets, money markets, and insurance.
Halal investing is gaining momentum even though many people are still unfamiliar with it. According to a 2023 report from the General Council for Islamic Banks and Financial Institutions, the global Islamic funds market has grown more than threefold over the last ten years and now manages close to $200 billion in assets. A Goldman Sachs report from December 2022 also predicted that by 2075, five of the ten largest global economies— India, Indonesia, Nigeria, Pakistan, and Egypt— will have Muslim populations totaling more than 850 million people.
The S&P High Yield Dividend Aristocrats Shariah index monitors the performance of companies within the Composite 1500 that meet Shariah guidelines and have consistently increased their dividends for a minimum of 20 years. These companies follow a disciplined dividend policy aimed at delivering steady growth in payouts over time.
Given this, we will take a look at some of the best halal stocks that pay dividends.
Image by Alexsander-777 from Pixabay
Our Methodology:
To compile this list, we chose the top 10 stocks from the S&P High Yield Dividend Aristocrats Shariah Index. These specific companies are known for consistently providing substantial dividends to their shareholders and demonstrating robust financial stability. We ranked these holdings based on the number of hedge funds that had invested in them by the end of Q1 2025, using data from Insider Monkey’s database.
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).
11. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 39
Archer-Daniels-Midland Company (NYSE:ADM) stands out as a top player in both human and animal nutrition, as well as a key global force in agricultural sourcing and processing. Its various business divisions, especially the more profitable Nutrition segment, help strengthen its overall stability. Although the Ag Services & Oilseeds unit operates in a high-volume, low-margin environment influenced by commodity price swings, ADM has managed to steadily grow its earnings over time.
Archer-Daniels-Midland Company (NYSE:ADM) reported mixed earnings in the first quarter of 2025. The company posted revenue of $20.1 billion, down 7.7% from the same period last year. The revenue also missed analysts’ estimates by $1.9 billion. The company highlighted that it has made progress on several elements of its internal improvement strategy. This included enhancing operations in North America, achieving cost reductions through specific operational and organizational adjustments, making headway in streamlining its portfolio, and maintaining a disciplined stance on capital allocation.
Archer-Daniels-Midland Company (NYSE:ADM) reported a strong cash position, ending the quarter with $864 million available in cash and cash equivalents. The company’s operating cash flow before working capital was $439 million. ADM is a Dividend King with 52 consecutive years of dividend growth under its belt. In addition, it has paid uninterrupted dividends to shareholders for 90 years straight.
Currently, Archer-Daniels-Midland Company (NYSE:ADM) offers a quarterly dividend of $0.51 per share and has a dividend yield of 3.75%, as of July 18. It is among the best halal stocks that pay dividends.
10. Kimberly-Clark Corporation (NASDAQ:KMB)
Number of Hedge Fund Holders: 45
Kimberly-Clark Corporation (NASDAQ:KMB) is one of the best halal dividend stocks. The company offers a wide range of everyday household essentials, such as diapers, tissue paper, and feminine hygiene products. It is behind several well-known brands, including Huggies, Kleenex, and Cottonelle.
Kimberly-Clark Corporation (NASDAQ:KMB) maintained a solid cash position during the first quarter of 2025. The company generated $327 million in operating cash flow, with capital expenditures totaling $204 million. It continued to prioritize shareholder returns, distributing $466 million through dividends and stock buybacks. The company’s revenue for the quarter came in at $4.84 billion, down 6% from the same period last year.
Kimberly-Clark Corporation (NASDAQ:KMB) has been growing its payouts for 53 consecutive years. Currently, it offers a quarterly dividend of $1.26 per share and has a dividend yield of 3.95%, as of July 18.
9. Sysco Corporation (NYSE:SYY)
Number of Hedge Fund Holders: 50
Sysco Corporation (NYSE:SYY) is an American multinational company engaged in the marketing and distribution of food and related goods. With operations across North America and Europe, it benefits from a vast distribution system. Its wide range of products — from meat and dairy to non-food items — has played a key role in helping the company manage risks across various economic environments over time.
Sysco Corporation (NYSE:SYY) reported a strong cash position in the first quarter of 2025, ending it with $1.5 billion in cash balance. In the first 39 weeks of FY25, the company generated an operating cash flow of $1.3 billion, and its free cash flow amounted to $954 million. During this period, it returned $1.5 billion to shareholders through dividends and share repurchases.
Sysco Corporation (NYSE:SYY) currently pays a quarterly dividend of $0.54 per share, having raised it by 6% in April this year. Through this increase, the company stretched its dividend growth streak to 55 years, which makes it one of the best halal stocks that pay dividends. The stock has a dividend yield of 2.75%, as of July 18.
