In this article, we are going to discuss the 12 best S&P 500 stocks to buy for dividends.
Dividend stocks remain a popular choice for income-focused investors. Financial experts often point to the broader market as a strong hunting ground for long-term dividend opportunities. According to Cabot Wealth Network, more than 75% of the stocks in the S&P 500 pay a dividend as of 2026, reflecting how actively companies are using dividends to attract and retain investors.
On June 17, CNBC reported that investors should place a greater emphasis on income as they navigate an uncertain market environment, according to Wells Fargo Investment Institute. Darrell Cronk, president of Wells Fargo Investment Institute and chief investment officer for Wealth and Investment Management, noted that investors face several challenges despite being able to lock in yields that are higher than those seen in decades. These challenges include inflation, income replacement risk when maturing bonds are replaced with new assets, stock market concentration, and elevated uncertainty as markets assess the impact of the U.S.-Iran war, higher oil prices, a new Federal Reserve chairman, and a mid-year election that could influence fiscal policy before and after the vote.
Tracie McMillion, head of global asset allocation strategy, made the following comment after the outlook’s release:
“Building an income-focused portfolio isn’t just about building a laddered bond portfolio anymore. It’s about building a resilient, multi-asset class income stream.”
She added that this approach includes dividend-paying stocks, which have the potential to grow alongside rising prices. Unlike traditional fixed-income investments, dividend stocks can provide a measure of protection against inflation while also generating income.
With that said, here are the Best Dividend Stocks to Buy in the S&P 500.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology
To collect data for this article, we referred to screeners to identify stocks that are part of the auspicious S&P 500 and then restricted our search to the top 200 companies by weight. We then further shortlisted stocks that had an annual dividend yield of over 2% and ranked them by the number of hedge funds invested in them at the end of Q1 2026, as per the Insider Monkey database. We kept our final selection limited to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Best S&P 500 Dividend Stocks to Buy According to Hedge Funds.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
12. Simon Property Group, Inc. (NYSE:SPG)
Number of Hedge Fund Holders: 48
Dividend Yield as of June 23: 4.06%
Simon Property Group, Inc. (NYSE:SPG) is a global leader in the ownership of premier shopping, dining, entertainment, and mixed-use destinations and an S&P 100 company.
On June 18, Scotiabank raised its price target on Simon Property Group, Inc. (NYSE:SPG) from $206 to $220, while keeping a ‘Sector Perform’ rating on the shares. The target boost implies an upside of over 2% from the current levels.
Scotiabank believes that REIT valuations have now become less attractive after a strong start to the year. As a result, it adjusted its subsector preferences based on its “relative valuation-versus-growth framework”.
The analyst firm continues to favor seniors housing the most and also upgraded its outlook on self-storage and net lease from ‘Marketweight’ to ‘Overweight’. On the other hand, it downgraded its views on industrial and shopping centers from ‘Overweight’ to ‘Marketweight’, citing relative valuation concerns.
Simon Property Group, Inc. (NYSE:SPG) recently raised its full-year 2026 real estate FFO guidance to a range of $13.10 to $13.25 per share, up from $13 to $13.25 per share previously.
11. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 51
Dividend Yield as of June 23: 3.46%
As the fifth-largest commercial bank in the United States, U.S. Bancorp (NYSE:USB) works across a diversified mix of businesses, including commercial and institutional banking, business banking, payments, wealth management, and consumer banking.
On June 17, U.S. Bancorp (NYSE:USB) declared a regular quarterly dividend of $0.52 per share. The dividend is payable on July 15 to shareholders as of the June 30 record. The bank is largely dependent on interest income instead of investment banking, so its profitability and revenue tend to be more predictable and consistent, helping it sustain its high dividend yield of 3.54%.
In other news, earlier on June 15, Stephens resumed coverage of U.S. Bancorp (NYSE:USB) with an ‘Equal Weight’ rating and a price target of $63, implying an upside of over 7% from the current levels.
Stephens reinstated coverage of nine super-regional banks and stated that it is “broadly constructive” regarding the group’s outlook, pointing to the improved operating leverage over the last year. The analyst firm also expects the 2026 capital return levels to hit levels not seen since 2019, with the potential for further acceleration pending the Basel 3 Endgame proposals.
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