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.
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