In this article, we will take a look at some of the best innovative stocks that pay dividends.
Innovation has become a key driving force in today’s market. With tech stocks drawing increased investor interest over the past year, it is evident where capital is flowing. Technology companies are harnessing disruptive tools such as artificial intelligence to analyze large and complex data sets. In the healthcare industry, progress in research and development has resulted in life-saving treatments and drug therapies. At the same time, the effects of climate change are pushing energy and utility providers to focus more on renewable energy. As a result, innovation is now central to the progress of nearly every industry.
This shift is not limited to established corporations. The growing number of startups across the United States also highlights this trend, as they bring forward new and innovative business ideas. Economist John Haltiwanger observed that Americans have been launching new businesses at a record pace. In fact, 2020 saw more startups than any previous year, with 2021 close behind. Data from the Kauffman Indicators of Entrepreneurship shows that over 80 percent of these startups survived their first year in 2021, the highest survival rate since 1999.
Given this, we will now take a look at some of the best innovative stocks that pay dividends.
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Our Methodology
For this article, we scanned Insider Monkey’s database of 1,000 hedge funds as of Q1 2025 and picked companies that actively prioritize and promote the development of new and groundbreaking ideas, products, services, or business processes. From that list, we picked 11 stocks with the highest number of hedge fund investors and ranked them in ascending order of hedge funds’ sentiment towards them. These companies belong to different sectors, including healthcare, technology, aerospace, and defense.
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. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 45
Hewlett Packard Enterprise Company (NYSE:HPE), headquartered in Texas, is a global information technology firm known for delivering smart, open, and forward-thinking tech solutions using a service-oriented model. It is recognized as one of the three key innovators behind the invention of inkjet printers, a major advancement in printing technology. The company also introduced the first programmable pocket calculator and played a role in the development of the atomic clock, which is capable of aligning global time with remarkable precision, accurate to within one-millionth of a second.
Hewlett Packard Enterprise Company (NYSE:HPE) is becoming a significant force in the fast-changing fields of edge computing and hybrid cloud, with a strong focus on helping businesses adopt artificial intelligence more easily. The company’s strategy revolves around making advanced technology both usable and widely available, matching the growing need among enterprises for integrated AI solutions. A key driver of this progress is the recent enhancement of HPE’s GreenLake platform, which now offers powerful features for AI and machine learning.
Hewlett Packard Enterprise Company (NYSE:HPE) is a solid dividend payer, having distributed regular dividends to shareholders since 2015. The company currently offers a quarterly dividend of $0.13 per share and has a dividend yield of 2.49%, as of July 28. It is among the best innovative stocks that pay dividends.
10. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 57
International Business Machines Corporation (NYSE:IBM) is one of the best innovative stocks that pays dividends. The global technology company, which first gained attention for its punch card machines, successfully adapted to the rise of digital computers as they became the industry norm. Over the years, it has made significant strides in areas such as software, computer memory, databases, personal computing, and more recently, cognitive computing. These groundbreaking developments played a key role in shaping billion-dollar businesses.
International Business Machines Corporation (NYSE:IBM) holds a solid market position thanks to its long-standing focus on innovation and extensive industry knowledge, both of which support clients in successfully adopting and expanding AI. Its generative AI segment has seen steady growth and has now surpassed $7.5 billion.
International Business Machines Corporation (NYSE:IBM) has raised its payouts consistently for 30 years, which makes it a Dividend Aristocrat. The company currently offers a quarterly dividend of $1.68 per share and has a dividend yield of 2.55%, as of July 28.
9. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 62
Caterpillar Inc. (NYSE:CAT) is an American company known for its expertise in construction, mining, and various types of engineering equipment. In the early 1900s, it introduced the first practical track-type tractor, also known as a crawler, which revolutionized the construction and earthmoving industry by providing better traction and easier handling on rough surfaces. The company is considered one of the best innovative stocks with dividends.
Caterpillar Inc. (NYSE:CAT)’s widespread global footprint gives it a solid advantage as international infrastructure spending continues to rise. With growing demand for construction equipment around the world and potential benefits from shifting geopolitical dynamics, the company presents a compelling opportunity for investors interested in both income and long-term growth. Its efficient operations, consistent dividend increases, and strong global positioning make it a top pick for those seeking a reliable and forward-looking industrial investment.
Caterpillar Inc. (NYSE:CAT) raised its quarterly dividend by 7% in June. This was the company’s 31st consecutive year of dividend growth. It now pays a quarterly dividend of $1.51 per share for a dividend yield of 1.40%, as of July 28.