In this article, we will take a look at some of the best dividend stocks to invest in.
For income-focused investors, dividend stocks are often a top choice. These stocks provide regular payments to shareholders, offering a steady way to build income over time. Data supports this strategy. According to a report by Hartford Funds, dividends have made up about 39% of total returns on average since the 1940s. The report also showed that stocks with higher dividend payouts have generally outperformed other dividend-paying stocks while experiencing lower volatility.
The income factor is key to investment success because it can help boost total returns and support long-term financial goals. A study by Eagle Investment Management compared the results of a $1,000,000 investment made on December 31, 2012, in the Dividend Aristocrats Index to a broader market index, assuming dividends were reinvested. The Dividend Aristocrats are companies that have increased their dividends for at least 25 years. By 2022, this investment would have generated $93,212 in income compared to $55,726 from the market. This gap highlights the stronger income potential of dividend aristocrats. Although based on past performance, the example shows the value of focusing on both dividend income and its long-term growth when building a portfolio.
Given this, we will take a look at some of the best dividend stocks for income investors.
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Our Methodology
To compile this article, we screened for stocks known for their consistent dividend track records and sustained shareholder payouts over an extended period. This group reflects stability and long-term performance in dividend payouts. From that group, we picked companies with the highest number of hedge fund investors, as per Insider Monkey’s database of Q1 2025. The stocks are ranked in ascending order of the number of hedge funds having stakes in them.
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. WD-40 Company (NASDAQ:WDFC)
Number of Hedge Fund Holders: 27
WD-40 Company (NASDAQ:WDFC) is an American firm, that is known for its household and multi-use products. The company manages a broad portfolio of well-known brands across maintenance, home care, and cleaning categories. Its products are distributed in more than 176 countries and territories worldwide.
In the third quarter of fiscal 2025, WD-40 Company (NASDAQ:WDFC)’s core maintenance segment saw a 2% increase in sales, bringing year-to-date growth to 6%, in line with its long-term targets. In addition, the company achieved a gross margin of 56% in the quarter, marking a 310-basis-point improvement from the previous year. This puts the company on track to surpass its 55% long-term gross margin goal for fiscal 2025, one year ahead of schedule.
WD-40 Company (NASDAQ:WDFC) also reported a strong cash position. The company ended the quarter with $51.6 million available in cash and cash equivalents and generated nearly $60 million in operating cash flow. Due to this solid cash position, the company raised its payouts for 17 consecutive years. It currently offers a quarterly dividend of $0.94 per share and has a dividend yield of 1.75%, as of July 31.
10. Portland General Electric Company (NYSE:POR)
Number of Hedge Fund Holders: 28
Portland General Electric Company (NYSE:POR) is a publicly traded utility headquartered in Oregon, focused on generating, transmitting, and distributing electricity. The stock presents both potential and risk. One concern is its West Coast location, where wildfires remain a persistent threat. However, the company also benefits from serving a strategically important area that hosts key international subsea communication cable landings. This makes it an attractive utility for data centers and tech firms, particularly in Oregon’s “Silicon Forest” region.
Portland General Electric Company (NYSE:POR) recently announced earnings for the second quarter of 2025. The company posted revenue of $807 million, which showed a 6.4% growth from the same period last year. These quarterly results were largely driven by a surge in demand from data center customers, which led to a 16.5% quarter-over-quarter increase in industrial load. Progress continued on several key initiatives, including the recovery of the Seaside battery, upgrades to the distribution system, and enhancements to the holding company structure. The company also reaffirmed its adjusted earnings guidance for 2025, projecting earnings of $3.13 to $3.33 per diluted share.
Portland General Electric Company (NYSE:POR) is a solid dividend payer. On July 19, the company declared a quarterly dividend of $0.525 per share, which fell in line with its previous dividend. It has been rewarding shareholders with growing dividends for the past 19 years, which makes POR one of the best dividend stocks for consistent income. As of July 31, the stock has a dividend yield of 5.11%.
9. Stanley Black & Decker, Inc. (NYSE:SWK)
Number of Hedge Fund Holders: 32
Stanley Black & Decker, Inc. (NYSE:SWK) is an American manufacturer known for its industrial tools, home hardware, and security products. The company is in the midst of a steady yet impactful transformation. It has already completed $1.7 billion of a planned $2 billion cost-reduction effort, resulting in a rebound in gross margins to 31.2%, which is a 1,200-basis-point improvement from the low point. At the same time, operating leverage is strengthening, and inventory levels are declining.
While Stanley Black & Decker, Inc. (NYSE:SWK)’s Tools & Outdoor division accounts for 87% of its revenue, the smaller Engineered Fastening segment plays a key role in areas like aerospace, automotive, and industrial production. Despite its strong market position and ties to reshoring, infrastructure, and automation trends, the stock is still down more than 69% from its 2021 peak and trades at under seven times its peak free cash flow.
Stanley Black & Decker, Inc. (NYSE:SWK) has paid uninterrupted dividends to shareholders for the past 148 years. On July 24, it declared a 1.2% hike in its quarterly dividend to $0.83 per share. This marked the company’s 59th consecutive year in which it has raised its dividends. The stock supports a dividend yield of 4.91%, as of July 31.
8. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 32
Realty Income Corporation (NYSE:O) is an American real estate investment trust company. The company’s broad and varied portfolio produces steady and increasing cash flow, which supports both dividend payments and the growth of its global real estate holdings.
Realty Income Corporation (NYSE:O) has also moved into credit investments, such as real estate loans and preferred equity, and is introducing a private capital fund management platform. These new initiatives are creating additional investment opportunities. Backed by one of the strongest financial foundations in the REIT industry, the company is well-positioned to keep growing its portfolio while also boosting earnings and dividends.
Realty Income Corporation (NYSE:O) is committed to providing shareholders with reliable monthly dividends that increase over time, a goal it has consistently met. Since going public in 1994, the company has paid 661 consecutive monthly dividends and raised its payout 131 times. It has increased its dividend every quarter for 131 straight quarters and maintained annual dividend growth for 30 consecutive years. It currently pays a monthly dividend of $0.269 per share and has a dividend yield of 5.75%, as of July 31.
7. Enbridge Inc. (NYSE:ENB)
Number of Hedge Fund Holders: 34
Enbridge Inc. (NYSE:ENB) is a strong pick for dividend investors, thanks to its attractive 6% yield, which is well above the market average. In addition, the company has a consistent history of dividend growth. It has raised its dividends for 30 consecutive years, demonstrating reliability and commitment to shareholder returns. With a low payout ratio and a solid investment-grade credit rating, Enbridge maintains the financial strength needed to support ongoing dividend payments and future increases.
Enbridge Inc. (NYSE:ENB)’s fee-based business model, built around critical energy infrastructure such as pipelines, provides stable and predictable cash flow. As one of the largest players in the North American midstream sector, Enbridge has the scale to grow through acquisitions and capital investments. It is also shifting toward more regulated natural gas utilities and clean energy projects, including offshore wind farms. These moves not only diversify its portfolio but also support long-term growth, strengthening the case for continued dividend increases.
Enbridge Inc. (NYSE:ENB) currently pays a quarterly dividend of C$0.9425 per share and has a dividend yield of 6.04%, as of July 31.
6. American Water Works Company, Inc. (NYSE:AWK)
Number of Hedge Fund Holders: 44
American Water Works Company, Inc. (NYSE:AWK) is a regulated utility that provides water and wastewater services to over 14 million people in 14 states. Its regulated utility operations are the core of its business, accounting for 92 percent of operating revenue in 2024. The company focuses on delivering clean and reliable water services across its service areas.
American Water Works Company, Inc. (NYSE:AWK) maintains a strong financial profile, supported by an investment-grade credit rating, which allows it to borrow at lower interest rates and under favorable terms. The company follows a conservative dividend policy, targeting a payout ratio of 50% to 60% of its adjusted earnings. With projected earnings growth between 7% and 9% annually, American Water Works expects its dividend to grow at a similar pace. The company has increased its dividend every year since going public in 2008.
American Water Works Company, Inc. (NYSE:AWK) currently pays a quarterly dividend of $0.8275 per share and has a dividend yield of 2.36%, as recorded on July 31.
5. Williams-Sonoma, Inc. (NYSE:WSM)
Number of Hedge Fund Holders: 48
Williams-Sonoma, Inc. (NYSE:WSM) is an American retailer known for its portfolio of upscale home goods brands, including Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, and Rejuvenation.
Despite a challenging retail environment and slower sales, Williams-Sonoma, Inc. (NYSE:WSM) has continued to perform well under the leadership of CEO Laura Alber. It has preserved strong profit margins by sticking to a full-price strategy, managing inventory effectively, and optimizing its store footprint. The company is also expanding its presence through business-to-business initiatives and by growing Rejuvenation, a lighting brand it acquired in 2011, with the goal of turning it into a $1 billion business.
On June 12, Williams-Sonoma, Inc. (NYSE:WSM) declared a quarterly dividend of $0.66 per share, which was in line with its previous dividend. It is among the best dividend stocks for consistent income as the company has raised its payouts for 16 consecutive years. As of July 31, the stock has a dividend yield of 1.41%.
4. Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 55
Chubb Limited (NYSE:CB) is a leading global insurer that offers a wide variety of coverage, including property and casualty, life insurance, and reinsurance. The company is known for its conservative underwriting approach and its broad, diversified product portfolio.
Chubb Limited (NYSE:CB) has a strong track record of consistent underwriting profits and careful cash management. The company has raised its dividend for 32 consecutive years, reflecting its financial strength and reliability. The company also produces solid free cash flow, which supports both dividend payments and share repurchases. With a low payout ratio of 17%, CB is well-positioned to maintain and grow its dividend over time.
Chubb Limited (NYSE:CB) currently offers a quarterly dividend of $0.97 per share, having raised it by 6.6% in May. The stock has a dividend yield of 1.46%, as of July 31.
3. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 75
American Express Company (NYSE:AXP) sets itself apart from other credit card companies by focusing on a wealthier customer base, offering premium gold and platinum cards, and serving a large number of corporate clients. Customers often benefit from generous travel rewards, making the brand particularly appealing to frequent travelers.
Unlike Visa or Mastercard, American Express Company (NYSE:AXP) not only issues cards but also runs its own payment network, allowing it to lend directly and earn interest income. Its dividend track record adds to its appeal, with a modest 1.1% yield supported by a low 21% payout ratio. The company has grown its dividend at an annual rate of 12% over the past five years and maintains a strong balance sheet, leaving plenty of room for future increases and long-term compounding.
American Express Company (NYSE:AXP) currently offers a quarterly dividend of $0.82 per share and has a dividend yield of 1.1%, as of July 31. It is among the best dividend stocks to invest in.
2. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 75
McDonald’s Corporation (NYSE:MCD) is easily recognized by its golden arches, but most of its locations— around 95 percent— are run by franchisees rather than the company itself. These franchised restaurants generate roughly 60% of the company’s yearly revenue.
Through its franchise model, McDonald’s Corporation (NYSE:MCD) earns income by collecting a percentage of sales as royalties and charging rent. Since franchisees handle much of the capital spending, this setup reduces costs for the company. However, in the recent quarter, McDonald’s reported a 1% decline in same-store sales. In the US, where around 40% of its sales come from, comparable sales dropped by 3.6% due to lower customer traffic. As a result, adjusted operating income also declined by 1%.
McDonald’s Corporation (NYSE:MCD) is just two years away from becoming a Dividend King. It has been raising its payouts for 48 consecutive years, which makes it one of the best dividend stocks for income investors. The company currently offers a quarterly dividend of $1.77 per share and has a dividend yield of 2.36%, as of July 31.
1. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 82
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading technology company known for its networking, security, software, and cloud computing solutions. It builds routers and switches that help transmit data across networks. In the third quarter of fiscal 2025, the company reported $14.1 billion in revenue, marking an 11% increase from the previous year. Earnings per share also rose 35% to $0.62.
Artificial intelligence has become a key growth area for Cisco Systems, Inc. (NASDAQ:CSCO), generating over $1 billion in AI-related revenue in 2024. The company aims to at least double that figure in 2025. Its recent $28 billion acquisition of Splunk has also played a major role in expanding its capabilities, particularly in network management, security, and AI integration.
Cisco Systems, Inc. (NASDAQ:CSCO) currently pays a quarterly dividend of $0.41 per share and has a dividend yield of 2.41%, as of July 31. The company has been rewarding its shareholders with growing dividends for the past 18 years, which makes it one of the best dividend stocks for income investors.
While we acknowledge the potential of CSCO 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 CSCO and that has 100x upside potential, check out our report about this cheapest AI stock.
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