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.
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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.
8. Kenvue Inc. (NYSE:KVUE)
Number of Hedge Fund Holders: 52
In August 2023, Johnson & Johnson separated its consumer health and hygiene products into a new publicly listed company called Kenvue Inc. (NYSE:KVUE). The new entity manages a portfolio of well-recognized brands across various product categories. Thanks to its international presence, the company holds a strategic edge over companies that primarily operate within domestic markets.
In the first quarter of 2025, Kenvue Inc. (NYSE:KVUE) reported revenue of $3.74 billion, which showed a 4% decline from the same period last year. However, the revenue beat analysts’ estimates by $57.4 million. The company updated its 2025 outlook to account for currency headwinds and increased costs from new tariffs. It expects net sales to rise 1% to 3% year-over-year, with organic growth of 2% to 4%, though foreign exchange is likely to reduce sales by about 1%. Adjusted operating income margin is projected to decline due to tariff impacts, while adjusted diluted EPS is expected to remain flat, slightly pressured by currency fluctuations.
Kenvue Inc. (NYSE:KVUE) reported an operating cash flow of $0.4 billion, and its free cash flow was $0.2 billion. Since the company was separated from Johnson & Johnson, it took on the legacy of being classified as a Dividend King. It currently pays a quarterly dividend of $0.205 per share and has a dividend 3.73%, as of July 18.
7. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 62
Target Corporation (NYSE:TGT)’s stock has dropped from the highs it reached during the pandemic, following a slowdown and eventual decline in its sales growth. The stock has also tumbled this year, falling by nearly 25% since the start of 2025.
That said, Target Corporation (NYSE:TGT) has consistently been a reliable choice for income-focused investors, boasting a 54-year track record of annual dividend increases, earning it a place among Dividend Kings. In June, the retailer raised its dividend by 1.8% to $1.14 per share, signaling its ongoing commitment to that streak despite current business challenges. With a dividend yield of 4.4%, as of July 18, the stock remains attractive.
Though Target Corporation (NYSE:TGT) has faced some headwinds, it continues to generate solid profits. Even if its earnings come in at the lower end of its full-year forecast, the dividend payout ratio would stay below 70%, indicating that the dividend is on solid ground for the foreseeable future.
6. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 62
Medtronic plc (NYSE:MDT) has maintained steady revenue and earnings over the years, demonstrating a track record of reliable performance. The company appears well-positioned to continue generating solid returns over time. This confidence stems from its strong innovation capabilities, established presence in the complex healthcare industry, and favorable long-term trends such as the global rise in aging populations.
In fiscal Q4 2024, Medtronic plc (NYSE:MDT) reported revenue of $8.93 billion, which showed a 4% growth from the same period last year. The revenue also beat analysts’ estimates by $98.2 million. The company posted a GAAP operating profit of $1.436 billion and an operating margin of 16.1%, reflecting year-over-year increases of 36% and 380 basis points, respectively.
Medtronic plc (NYSE:MDT)’s cash position remained stable in FY25. The company’s operating cash flow for the year was $7 billion, and its free cash flow amounted to $5.2 billion. It ended the year with $2.2 billion available in cash and cash equivalents. The company offers a quarterly dividend of $0.71 per share, having raised it by 1.4% in May. This marked the company’s 48th consecutive year of dividend growth, which makes it one of the best halal stocks that pay dividends. As of July 18, the stock has a dividend yield of 3.17%.
5. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 69
Texas Instruments Incorporated (NASDAQ:TXN) is one of the best halal stocks that pay dividends. On July 18, the company declared a quarterly dividend of $1.36 per share, which was in line with its previous dividend. It has been growing its payouts for 21 consecutive years. The stock supports a dividend yield of 2.51%, as of July 18.
Texas Instruments Incorporated (NASDAQ:TXN)’s cash position showed the strength of its dividend. The company’s operating cash flow over the past 12 months totaled $6.2 billion, highlighting the strength of its business model, the quality of its product offerings, and the advantages of 300mm production. Free cash flow during the same period amounted to $1.7 billion. Over the past year, the company allocated $3.8 billion to research and development and selling, general, and administrative expenses, invested $4.7 billion in capital expenditures, and returned $6.4 billion to shareholders.
Texas Instruments Incorporated (NASDAQ:TXN) operates with a solid business model focused on analog and embedded processing solutions, backed by durable competitive advantages. A central aspect of its long-term strategy for growing free cash flow per share is its disciplined capital allocation. This involves selectively funding R&D initiatives, expanding capabilities, investing in manufacturing infrastructure, considering strategic acquisitions, and consistently returning value to shareholders.
4. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 71
PepsiCo, Inc. (NASDAQ:PEP) is among the best halal stocks that pay dividends. The company recently reported its Q2 2025 earnings, with revenues of $22.7 billion, up 1% from the same period last year. It maintained strong momentum in its international operations, while its North American businesses showed improved execution and strengthened their competitiveness in important subcategories and distribution channels.
PepsiCo, Inc. (NASDAQ:PEP) projects a modest rise in organic revenue for 2025, with core earnings per share remaining steady on a constant-currency basis. The company plans to return around $8.6 billion to shareholders, including $7.6 billion in dividends and $1 billion through share buybacks.
PepsiCo, Inc. (NASDAQ:PEP) is a Dividend King, as the company has raised its payouts for 53 years in a row. The company offers a quarterly dividend of $1.4225 per share and has a dividend yield of 3.97%, as of July 17.
3. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 81
Chevron Corporation (NYSE:CVX) is one of the best halal dividend stocks. The company has long been a reliable choice for investors, particularly those focused on dividends. It has consistently delivered strong cash flows and has increased its dividend for 38 consecutive years. Although its share price tends to move with shifts in oil prices— mirroring the broader volatility seen in the energy sector— Chevron has remained a rewarding option for long-term dividend-focused investors.
Chevron Corporation (NYSE:CVX)’s upstream segment remains a major strength and is expected to keep supporting the company’s solid financial performance. With contributions from its TCO joint venture in Kazakhstan and its production assets in the Permian Basin and Gulf of America, the company anticipates an additional $10 billion in free cash flow by 2026 if Brent Crude averages $70 per barrel. If prices average $60 per barrel instead, the company still expects around $9 billion in incremental free cash flow from this segment.
Currently, Chevron Corporation (NYSE:CVX) offers a quarterly dividend of $1.71 per share and has a dividend yield of 4.56%, as of July 18.
2. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 87
The Coca-Cola Company (NYSE:KO) has been in business for more than 100 years, and its long-standing presence and global reach are part of why it’s among Warren Buffett’s top picks. As the world’s biggest beverage company, it generates close to $47 billion in revenue over the past 12 months. The stock has surged by nearly 13% since the start of 2025.
The Coca-Cola Company (NYSE:KO) is often viewed as a reliable or safe investment, largely because it’s expected to remain resilient regardless of global economic shifts. Investors have also responded positively to how the company has handled tariff changes, thanks in part to its localized production and the fact that it manufactures the concentrate for its US products within the country.
The Coca-Cola Company (NYSE:KO) is a solid dividend payer with 63 consecutive years of dividend increases. On July 17, the company declared a quarterly dividend of $0.51 per share, which was in line with its previous dividend. The stock offers a dividend yield of 2.92%, as of July 18.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 94
Exxon Mobil Corporation (NYSE:XOM)’s broad international presence and varied operations make it a strong contender for investors interested in the energy sector. Its business spans multiple countries, including the US, Indonesia, Guyana, Papua New Guinea, and Qatar.
Beyond its global footprint, Exxon Mobil Corporation (NYSE:XOM) also benefits from multiple sources of income. Its upstream segment is involved in energy exploration and development, while its downstream operations handle refining and the sale of fuel, lubricants, and other petrochemical products. This makes it one of the most reliable dividend stocks.
Exxon Mobil Corporation (NYSE:XOM)’s reliable and steadily growing dividend has been driven by two main factors. First, the company operates with an integrated business model that relies on high-quality assets that are both low-cost and high-margin. This setup allows it to generate more stable cash flow than many of its competitors. Second, Exxon has a very strong balance sheet with the lowest leverage ratio among similar companies. This financial strength gives it the flexibility to borrow during times of lower oil prices to support growth and then pay down that debt when prices improve.
Exxon Mobil Corporation (NYSE:XOM) currently pays a quarterly dividend of $0.99 per share and has a dividend yield of 3.67%, as of July 18. It is among the best halal dividend stocks as the company has raised its payouts for 42 consecutive years.
While we acknowledge the potential of XOM 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 XOM and that has 100x upside potential, check out our report about this cheapest AI stock.
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