In this article, we will take a look at some of the best dividend paying stocks.
Bank of America’s business-cycle gauge has recently shifted in a way that bodes well for certain dividend-paying stocks. Equity and quant strategist Savita Subramanian noted that the bank’s US Regime Indicator strengthened for a second straight month in August, signaling a move into the recovery phase. This measure, which tracks both economic and corporate data, has been fluctuating in and out of recovery since February 2022 due to mixed macro signals and uncertainty around inflation, she explained.
Looking at history, Subramanian pointed out that high-dividend-yield strategies have tended to perform well during recovery periods. In her analysis, such strategies outpaced the equal-weighted S&P 500 by an average of 5.6% when sector tilts were allowed, and by 4.5% when applied in a sector-neutral approach. She also argued that dividends may now carry more weight in total returns than they did over the past decade.
Even so, she cautioned that yield alone should not be the deciding factor for investors, since unusually high payouts can sometimes hint at trouble within a company. Instead, she suggested focusing on firms offering dividend yields that are comfortably above market averages but not excessively high, especially if the market is entering a period where dividends contribute more meaningfully to overall returns compared with the low-rate era.
Given this, we will take a look at some of the best dividend paying stocks to invest in.
Our Methodology
For this article, we scanned Insider Monkey’s database of around 1,000 hedge funds and picked the top 12 dividend stocks, which means the stocks mentioned in this list are the most popular dividend-paying stocks among hedge funds as of the second quarter of 2025. The stocks mentioned below pay regular dividends to shareholders and have strong financials. The list is ranked in ascending order of the number of hedge funds having stakes in the companies.
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).
12. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 76
Chevron Corporation (NYSE:CVX) is an American multinational energy corporation. It is regarded as one of the lowest-risk companies in the energy sector. With industry-leading efficiency, it can break even at around $30 per barrel, allowing it to generate strong cash flow even when oil prices are subdued. This cost advantage also gives Chevron the flexibility to invest consistently through market cycles, positioning it for long-term growth.
Chevron Corporation (NYSE:CVX) is beginning to benefit from several large-scale projects, including the Future Growth Project in Kazakhstan, which began production earlier this year and is steadily moving toward full capacity. In addition, the company has wrapped up new developments in the Gulf of Mexico.
Together, these projects and other initiatives are expected to lift Chevron Corporation (NYSE:CVX)’s legacy operations to generate about $10 billion in additional free cash flow next year. That marks a significant jump from the $15 billion in free cash flow it produced the previous year.
Due to its consistent cash flow, Chevron Corporation (NYSE:CVX) is a strong dividend company. It currently offers a quarterly dividend of $1.71 per share and has a dividend yield of 4.38%, as of September 19. The company has raised its payouts for 38 years in a row.
11. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 79
Analog Devices, Inc. (NASDAQ:ADI) develops and sells high-performance analog, mixed-signal, and digital signal processing chips that power a wide range of uses, including industrial automation, automotive systems, consumer electronics, and advanced communications networks.
In recent years, Analog Devices, Inc. (NASDAQ:ADI) has placed strong emphasis on innovation and research and development. The aim is to stay at the forefront of technology while meeting the evolving demands of its industrial, automotive, communications, and consumer markets. Its long-term success depends on sustained R&D spending, close collaboration with customers, and aligning its solutions with major growth trends like the digital transformation of manufacturing and the rise of AI-powered infrastructure.
In addition, Analog Devices, Inc. (NASDAQ:ADI) has also been distributing dividends generously over the years, which makes it one of the best dividend-paying stocks to buy now. The company has raised its payouts for 21 years straight. Currently, it pays a quarterly dividend of $0.99 per share and has a dividend yield of 1.61%, as of September 19.
10. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 81
Cisco Systems, Inc. (NASDAQ:CSCO) develops and markets networking gear, security solutions, collaboration platforms, and observability tools. Its offerings focus on enabling connectivity, protecting networks, and delivering actionable data insights, available through hardware, software, or subscription services. The company’s customers include telecom providers, large corporations, and government entities around the globe.
Over the years, Cisco Systems, Inc. (NASDAQ:CSCO) has strengthened its portfolio through major acquisitions such as ThousandEyes, Acacia Communications, and Splunk. Looking ahead, it stands to gain from rising infrastructure investments as organizations modernize their networks to support the growing demands of AI-driven applications.
In addition, Cisco Systems, Inc. (NASDAQ:CSCO) is a solid dividend company. It has been rewarding shareholders with growing dividends for the past 18 consecutive years, which makes it one of the best dividend paying stocks. The company’s quarterly dividend comes in at $0.41 per share and has a dividend yield of 2.41%, as of September 19.
9. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 82
Comcast Corporation (NASDAQ:CMCSA), one of the biggest names in internet and cable, continues to navigate a challenging industry. On one hand, it faces stiff competition in broadband services, while on the other, its traditional cable business has been pressured as more consumers shift to streaming and cut the cord. These headwinds have weighed on its stock, which has fallen nearly 16% in 2025.
That said, Comcast Corporation (NASDAQ:CMCSA) still holds a dominant position, running Xfinity, the largest pay-TV and home internet provider in the US, and Sky, the biggest pay-TV operator in Europe. Its portfolio also includes several broadcast and cable channels, as well as live-action and animated film studios.
Beyond that, Comcast Corporation (NASDAQ:CMCSA) runs the Peacock streaming platform and Comcast Spectacor, a sports entertainment company with a strong presence in Philadelphia. It also oversees four Universal Studios theme parks across the globe, adding another layer of diversification to its business.
Comcast Corporation (NASDAQ:CMCSA) is one of the best dividend paying stocks to buy, as the company has raised its payouts for 21 consecutive years. It offers a quarterly dividend of $0.33 per share and has a dividend yield of 4.18%, as of September 19.
8. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 83
Pfizer Inc. (NYSE:PFE) ranks among the world’s top pharmaceutical companies, with vast resources to back its research and development efforts. Still, the process of discovering, testing, and getting approval for new drugs is complex, time-intensive, and carries no guarantees, no matter how much funding is committed.
In the second quarter, Pfizer Inc. (NYSE:PFE) reported a 10% year-over-year rise in revenue and a 30% jump in earnings per share. Management emphasized its confidence in execution, highlighting that full-year 2025 adjusted diluted EPS guidance was raised to reflect the company’s ability to deliver on strategic priorities and generate solid returns for shareholders.
Moreover, Pfizer Inc. (NYSE:PFE) has always grabbed income investors’ attention because of its solid dividend history. The company has been growing its dividends for 25 years in a row and offers a quarterly dividend of $0.43 per share. With a dividend yield of 7.16%, as of September 19, PFE is among the best dividend paying stocks.
7. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG) is the powerhouse behind a wide range of household staples, with a portfolio that includes leading brands like Ariel laundry detergent, Pampers diapers, Bounty paper towels, Gillette razors, and several skincare lines.
The Procter & Gamble Company (NYSE:PG) has built strong global retail relationships, making its products available in more than 180 countries, and it employs roughly 109,000 people worldwide.
As part of an ongoing restructuring, The Procter & Gamble Company (NYSE:PG) plans to cut around 7,000 jobs over the next two years. The move has been accelerated by economic pressures tied to tariffs. In response to these same challenges, the company also announced price increases on about a quarter of its US product lineup.
That said, The Procter & Gamble Company (NYSE:PG) has always fulfilled its shareholders’ obligation with its dividend history. The company holds one of the longest dividend growth streaks in the market, spanning 69 years. It offers a quarterly dividend of $1.0568 per share and has a dividend yield of 2.71%, as of September 19.
6. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 89
AbbVie Inc. (NYSE:ABBV) is a pharmaceutical company that was spun off from Abbott Laboratories in 2013 and is worth considering for a long-term portfolio. One of the strongest reasons to invest in the company is its dividend. The company’s recent dividend yield stood at a solid 2.9%, compared with just 1.2% for the broader market. Even better, the dividend has been growing steadily, with room for more increases.
Over the past five years, AbbVie Inc. (NYSE:ABBV) has raised its dividend by an average annual rate of 7%. The annual payout recently reached about $6.56 per share, up from $5.20 in 2021 and $3.59 in 2018, showing strong growth over time.
AbbVie Inc. (NYSE:ABBV)’s payout ratio, which is the portion of earnings paid out as dividends, is also at a comfortable level of less than 50%. This gives the company plenty of flexibility to continue raising dividends in the future.
Like other drugmakers, AbbVie Inc. (NYSE:ABBV) has experienced the loss of patent protection on key products, most notably its blockbuster Humira. However, this was expected, and the company has built a strong pipeline of around 90 treatments. In 2024 alone, it invested nearly $11 billion in research and development, with most of those treatments now in the mid to late stages of progress.
AbbVie Inc. (NYSE:ABBV) currently offers a quarterly dividend of $1.64 per share and has been growing its payouts for 53 consecutive years, which makes it one of the best dividend paying stocks to buy.
5. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 89
Union Pacific Corporation (NYSE:UNP) ranks among the largest railroad operators in the United States. Over the years, the holding company has purchased several railroads and combined them under its main subsidiary, Union Pacific Railroad. Today, its network covers 23 states and spans more than 32,000 miles, handling bulk, industrial, and premium freight shipments.
In May 2025, Union Pacific Corporation (NYSE:UNP) wrapped up testing of its first hybrid battery-electric locomotive. These new locomotives are projected to use up to 80% less fuel compared with standard diesel models.
In addition to its ongoing projects, Union Pacific Corporation (NYSE:UNP) is a strong dividend company. It has been paying uninterrupted dividends to shareholders for the past 125 years and has raised its payouts for 19 years straight. The company offers a quarterly dividend of $1.38 per share and has a dividend yield of 2.50%, as recorded on September 18.
4. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 95
Johnson & Johnson (NYSE:JNJ) is a major player in the pharmaceutical and medical device industries, with a recent market value close to $425 billion. The company is also showing growth, as second-quarter revenue increased 5.8% from the previous year and earnings rose 18%.
Until 2023, Johnson & Johnson (NYSE:JNJ) operated a strong consumer healthcare division that produced well-known products such as Tylenol and Band-Aid. That division was spun off into a separate company called Kenvue.
Johnson & Johnson (NYSE:JNJ)’s broad portfolio includes immunology treatments like Stelara and Tremfya, as well as cancer drugs such as Darzalex and Erleada. The company also has 40 programs currently in late-stage clinical trials. These trials are evaluating new drug candidates and seeking additional approvals for existing treatments like Stelara and Tremfya.
Johnson & Johnson (NYSE:JNJ) is popular among income investors because of its generous dividends. The company holds a 63-year track record of dividend growth, which makes it one of the best dividend paying stocks. Currently, it pays a quarterly dividend of $1.30 per share and has a dividend yield of 2.95%, as of September 19.
3. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 100
The Charles Schwab Corporation (NYSE:SCHW) ranks among the largest investment services providers in the US. The company offers brokerage, banking, wealth management, and financial advisory services to both individuals and institutions. Its wide range of products, cost-efficient model, and nationwide branches have helped it attract retail investors, independent financial advisers, and workplace retirement plans.
In recent years, The Charles Schwab Corporation (NYSE:SCHW) has focused on scaling its operations, improving efficiency, and fully integrating TD Ameritrade, which it acquired in 2020, into its overall business. Key drivers of its success include strong cost discipline, effective use of capital, adaptability to regulatory shifts, and continued innovation in wealth management and trading technology.
The Charles Schwab Corporation (NYSE:SCHW) is one of the best dividend paying stocks to buy, as the company has been paying regular dividends to shareholders since 1990. Currently, the company offers a quarterly dividend of $0.27 per share and has a dividend yield of 1.14%, as of September 19.
2. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 102
Citigroup Inc. (NYSE:C) main business lies in traditional banking services for both individuals and companies. This includes checking and savings accounts as well as mortgage and business loans. While these services are standard across the industry, competition is intense, with Citigroup going up against both local banks and big national players like Bank of America. Its broad scale, with branches across the US and internationally, gives it an edge over smaller rivals, but that alone doesn’t set it apart from its largest peers.
Beyond its core banking activities, Citigroup Inc. (NYSE:C) is active in capital markets, investment banking, and wealth management, making it a highly diversified institution. Still, this is also true of other major banks. For investors who want exposure to a large financial institution, the bank can be a reasonable option.
Citigroup Inc. (NYSE:C) has distributed dividends regularly for the past 34 years and currently pays a quarterly dividend of $0.60 per share. With a dividend yield of 2.34%, as of September 19, C is among the best dividend paying stocks to buy now.
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 159
UnitedHealth Group Incorporated (NYSE:UNH) is a major player in the healthcare industry, offering insurance products through its UnitedHealthcare division and providing healthcare services via its Optum unit.
Despite its size and influence, UnitedHealth Group Incorporated (NYSE:UNH) has recently encountered several significant challenges. In 2024, its subsidiary Change Healthcare was linked to the largest healthcare data breach on record. Leadership has also been unsettled, with CEO Andrew Witty stepping down unexpectedly in May 2025 for personal reasons, followed by a CFO change in July. That same month, the company revealed it is under both criminal and civil investigation by the Department of Justice.
However, these challenges did not diminish UnitedHealth Group Incorporated (NYSE:UNH)’s appeal, as its steady dividend remains a key strength. The company has been rewarding shareholders with increasing dividends consecutively for 14 years. It pays a quarterly dividend of $2.21 per share and has a dividend yield of 2.63%, as of September 19.
While we acknowledge the potential of UNH 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 UNH and that has 100x upside potential, check out our report about this cheapest AI stock.
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