In this article, we will take a look at some of the most promising stocks that pay dividends.
For many years, growth stocks have largely driven market performance, while dividend-paying stocks received less attention from investors.
In recent years, however, the situation has shifted. Rising inflation, prolonged higher interest rates, and persistent market volatility have led many investors, especially those with long-term goals and a lower tolerance for risk, to seek ways to protect their portfolios while still pursuing potential gains. As a result, dividend-paying stocks, which can help reduce volatility and enhance returns, have gained renewed appeal.
According to Morningstar, global assets under management in dividend-focused ETFs reached nearly $600 billion as of December 31, 2024, more than twice the amount recorded in December 2020. This sharp increase highlights the growing popularity of dividend investing.
During uncertain market conditions, investors may benefit from focusing more on the quality of dividends, which involves assessing factors such as free cash flow and interest expenses. Given this, we will take a look at some of the most promising dividend stocks.
Our Methodology
To compile this article, we first scanned a list of 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 further refined our selection criteria by identifying stocks with a projected upside potential of over 10% based on analyst price targets, as of October 8. The stocks are ranked according to their upside potential.
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. Verizon Communications Inc. (NYSE:VZ)
Analyst Upside Potential as of October 8: 10.49%
Verizon Communications Inc. (NYSE:VZ) is a New York-based telecommunications company that also offers home internet services to its consumers. Considering the company’s scale, its revenue hasn’t grown above 6% in the last 15 years, which isn’t working in its favor. In addition, analysts are expecting a modest increase of about 3% in its revenue this year and the next.
That said, Verizon Communications Inc. (NYSE:VZ) has other positive aspects worth noting. In the second quarter of 2025, the company added 278,000 new fixed wireless access subscribers, bringing its total to more than 5.1 million. With this momentum, it appears on track to reach its next goal of 8 to 9 million subscribers by 2028. Its cash position is also stable, as it generated nearly $9 billion in free cash flow in the first half of 2025. The company now expects its free cash flow to be in the range of $19.5 billion to $20.5 billion for FY25. This projected cash flow would be able to cover the company’s dividend comfortably, which makes it a strong option for income investors. Moreover, it would also strengthen the company’s position in terms of its debt.
Verizon Communications Inc. (NYSE:VZ)’s dividend is already growing. In fact, the company has raised its dividend for 19 years in a row. Its dividend payments amount to nearly $12 billion annually, which demonstrates its ability to continue shareholder returns. Verizon offers a quarterly dividend of $0.69 per share and has a dividend yield of 6.68%, as of October 8.
11. PepsiCo, Inc. (NASDAQ:PEP)
Analyst Upside Potential as of October 8: 12.13%
PepsiCo, Inc. (NASDAQ:PEP) is one of the most recognized names in the world and a major force in the global snacks and beverages market. The company leads the savory snack segment and ranks as the second-largest beverage maker after Coca-Cola.
One of PepsiCo, Inc. (NASDAQ:PEP)’s strengths lies in its diversified portfolio, which includes carbonated drinks, bottled water, sports and energy beverages, and ready-to-eat snacks, together accounting for about 55% of its revenue. The company also has a strong global presence, with international operations contributing roughly 40% of total sales and operating profits in 2024.
To boost efficiency and support long-term growth, PepsiCo, Inc. (NASDAQ:PEP) has been closing underutilized plants, enhancing its enterprise resource planning (ERP) systems, and adopting artificial intelligence to streamline operations. It is also finding cost savings in procurement to free up capital for reinvestment in new product innovation. These efforts reflect a disciplined approach aimed at improving margins while maintaining growth potential.
PepsiCo, Inc. (NASDAQ:PEP) also stands out for its dividend consistency. The company has raised its dividend for 53 consecutive years and currently offers a quarterly payout of $1.4225 per share, yielding about 4.10% as of October 8.
10. The Sherwin-Williams Company (NYSE:SHW)
Analyst Upside Potential as of October 8: 12.32%
The Sherwin-Williams Company (NYSE:SHW) traces its roots back to 1866, and during this time, the company has built a long-standing legacy that extends well beyond its reputation as a reliable dividend payer. What began as a modest paint business has grown into a major player in the coatings industry, offering products for automotive and marine use, industrial wood finishes, and various other applications. The company’s vast network includes more than 5,400 stores and branches, along with over 140 manufacturing and distribution centers.
The Sherwin-Williams Company (NYSE:SHW)’s appeal as an income stock lies in the consistency and sustainability of its dividends. Over the past decade, it has maintained a conservative payout ratio of about 26.6%, supported by strong free cash flow that easily covers its distributions.
For 46 consecutive years, The Sherwin-Williams Company (NYSE:SHW) has rewarded shareholders with steady dividend increases. If it continues this trend for another four years, the company will join the elite group of Dividend Kings. The company pays a quarterly dividend of $0.79 per share, translating to a yield of roughly 0.94%, as of October 8.
9. Walmart Inc. (NYSE:WMT)
Analyst Upside Potential as of October 8: 12.5%
Walmart Inc. (NYSE:WMT) is widely viewed as one of the more reliable investment choices in retail. Its stores serve as a one-stop destination for millions of shoppers, offering everything from groceries and daily necessities to discretionary products. Over the years, Walmart has demonstrated remarkable resilience, often thriving while many competitors have faced challenges.
Even during economic downturns, when consumers become more cautious with spending, Walmart Inc. (NYSE:WMT) tends to hold its ground. Its massive scale gives it strong bargaining power with suppliers, enabling the company to keep prices lower and pass savings on to customers. This advantage helps the company stay competitive, even when inflation and tariffs drive up costs across the retail industry.
Walmart Inc. (NYSE:WMT) has also strengthened its position by expanding its digital presence. Its e-commerce operations now rank among the largest in the US, second only to Amazon, making shopping even more convenient for customers.
Financially, Walmart Inc. (NYSE:WMT) stands out for its consistent shareholder returns. It holds the title of Dividend King, with 52 consecutive years of dividend increases, which makes it one of the most promising stocks. The company currently pays a quarterly dividend of $0.235 per share, yielding about 0.91%, as of October 8.
8. Bank of America Corporation (NYSE:BAC)
Analyst Upside Potential as of October 8: 13.2%
Bank of America Corporation (NYSE:BAC) ranks among the world’s largest financial institutions, with operations in the US and over 35 other countries. Headquartered in North Carolina, the bank serves roughly 69 million customers through about 3,700 branches, a network of 15,000 ATMs, and an extensive digital platform.
Bank of America Corporation (NYSE:BAC) has enjoyed a boost from the recent period of higher interest rates, which helped lift its net interest income. In the second quarter, the bank reported $14.7 billion in net interest income, a 7% increase from the same period last year. Even as the Federal Reserve begins to cut rates, the bank is expected to hold steady, supported by renewed borrowing and mortgage refinancing activity.
Bank of America Corporation (NYSE:BAC) continues to focus on shaping the future of banking through innovation and a solid financial foundation. With a strong balance sheet and access to low-cost capital, it remains a dependable choice for dividend-oriented investors. The company has raised its dividend for 11 straight years and currently pays a quarterly dividend of $0.28 per share. As of October 8, the stock has a dividend yield of 2.25%.
7. The Home Depot, Inc. (NYSE:HD)
Analyst Upside Potential as of October 8: 14.6%
The Home Depot, Inc. (NYSE:HD) is an American multinational home improvement retailer that sells tools, construction products, appliances, and other related products. The company typically reports its highest sales during the summer, when home improvement projects are most common. In the third quarter of fiscal 2025, which ended on August 3, the company recorded $45.3 billion in revenue. This represented a 4.9% increase compared to the same period last year and a 13.6% rise from the previous quarter.
With a dominant position in the market, The Home Depot, Inc. (NYSE:HD) continues to deliver steady and reliable results. While its growth is not always rapid, the company has shown resilience by maintaining strong sales even during economic slowdowns.
As the largest home improvement retailer, The Home Depot, Inc. (NYSE:HD) is well-positioned to keep expanding and remains one of the more stable investment options. The stock also appeals to dividend investors, as the company has raised its dividend payments for 15 consecutive years. Currently, it pays a quarterly dividend of $2.30 per share and has a dividend yield of 2.40%, as of October 8.
6. Oracle Corporation (NYSE:ORCL)
Analyst Upside Potential as of October 8: 17.2%
Oracle Corporation (NYSE:ORCL) is a Texas-based multinational technology company. The stock is generating strong returns this year, surging by nearly 74% since the start of 2025. The company has recently outpaced many of its competitors, thanks to its strong focus on expanding cloud services for companies in the rapidly growing artificial intelligence sector. Businesses aiming to lead in AI need massive computing power to train and operate their models, and Oracle is meeting that demand by building and supplying the necessary data centers.
This strategic shift has fueled impressive growth. Over the past five years, Oracle Corporation (NYSE:ORCL)’s revenue has climbed about 46%, rising from $39 billion to $59 billion. This marks a significant turnaround, as the company had faced a decade of slow progress between 2011 and 2021, when its revenue fluctuated between $35 billion and $40 billion before taking off in 2022.
Oracle Corporation (NYSE:ORCL)’s dividend performance also stands out, with the company consistently paying dividends since 2009. Over the past 12 months, the company generated an operating cash flow of $21.5 billion, up 13% YoY. This cash flow shows that ORCL is in perfect shape to fund its dividends in the coming years, making it one of the most promising stocks. The company pays a quarterly dividend of $0.50 per share and has a dividend yield of 0.69%, as of October 8.
5. Accenture plc (NYSE:ACN)
Analyst Upside Potential as of October 8: 17.4%
Accenture plc (NYSE:ACN) is a global professional services company that focuses on digital transformation, consulting, and technology solutions. Its core strategy revolves around promoting digital growth by incorporating advanced technologies such as cloud computing and artificial intelligence. Operating in more than 120 countries, the company uses its extensive global network to provide tailored solutions that address a wide range of business challenges.
In recent years, Accenture plc (NYSE:ACN) has concentrated on strengthening its leadership in technology and innovation. Through its advancements in AI and a series of strategic acquisitions, the company has reinforced its standing in the global marketplace.
On the financial side, Accenture plc (NYSE:ACN) is popular among dividend investors because of its strong cash position. In fiscal Q4 2025, the company reported a free cash flow of $3.8 billion, and it came in at nearly $11 billion for the whole year. For FY26, the company expects to return $9.6 billion in shareholder returns. On September 25, it announced a 10.1% hike in its quarterly dividend to $1.63 per share. Through this increase, the company stretched its dividend growth streak to 15 years, which makes ACN one of the most promising stocks. The stock supports a dividend yield of 2.58%, as of October 8.
4. Waste Management, Inc. (NYSE:WM)
Analyst Upside Potential as of October 8: 18.9%
Waste Management, Inc. (NYSE:WM), the largest provider of waste collection, recycling, and landfill services in North America, offers a solid combination of stability and growth. Its vast scale, long-term contracts, and essential operations generate steady cash flows that support consistent dividend growth over time. The company’s contract-based model has proven resilient across different economic conditions. It is also expanding its reach by investing in recycling and renewable natural gas projects, both of which are durable industries that can strengthen profitability in the years ahead.
Waste Management, Inc. (NYSE:WM) has a strong track record of supporting its dividend through business growth. In the second quarter, the company’s core collection and disposal operations, including household pickup, commercial routes, and landfills, achieved a 7.1% YoY increase in revenue. Overall, total revenue rose 19% to around $6.4 billion, partly driven by the late 2024 acquisition of Stericycle, a company specializing in medical waste management and secure information destruction.
Waste Management, Inc. (NYSE:WM) has increased its dividend for 22 consecutive years, reflecting its steady financial performance and commitment to shareholders. The company’s quarterly dividend comes in at $0.825 per share and has a dividend yield of 1.50%, as of October 8.
3. Honeywell International Inc. (NASDAQ:HON)
Analyst Upside Potential as of October 8: 20.2%
Honeywell International Inc. (NASDAQ:HON) stands as one of the major players in the diversified industrial sector, providing products and solutions across a wide range of industries and regions worldwide. The company operates through several key segments, including Aerospace Technologies, Industrial Automation, Building Automation, and Energy and Sustainability Solutions, helping organizations improve efficiency and innovation.
With nearly 140 years of experience, Honeywell International Inc. (NASDAQ:HON) has built a strong reputation for reliability and quality. The ongoing growth in e-commerce has increased demand for warehouse automation, an area where Honeywell offers advanced solutions. Its automation technologies have also proven effective in enhancing productivity and delivering solid returns on investment.
On September 26, Honeywell International Inc. (NASDAQ:HON) announced a 5.3% increase in its quarterly dividend, raising it to $1.19 per share. This marks the 16th dividend hikes over 15 consecutive years, underscoring Honeywell’s steady commitment to rewarding shareholders. With a dividend yield of 2.27%, as of October 8, HON is among the most promising stocks to invest in.
2. Kenvue Inc. (NYSE:KVUE)
Analyst Upside Potential as of October 8: 32.8%
Kenvue Inc. (NYSE:KVUE) is a consumer health company that offers a wide range of over-the-counter medicines, personal care products, and wellness items. Its portfolio includes trusted brands such as Tylenol for pain relief, Neutrogena for skincare, and Listerine for oral health. The stock is down by over 24% since the start of 2025.
President Donald Trump recently claimed that Tylenol use during pregnancy could raise autism risk in children, prompting the FDA to consider warning labels and advise doctors to limit use. The comments caused Kenvue Inc. (NYSE:KVUE)’s stock to drop and spurred a wave of potential lawsuits. Kenvue and medical experts rejected the claim, noting there’s no proven link, and the FDA later clarified that acetaminophen remains the safest pain reliever for pregnant women. The controversy adds pressure to the company, which was already struggling with weak performance and leadership changes.
Despite recent challenges, Kenvue Inc. (NYSE:KVUE) remains an appealing option for income-focused investors due to its solid dividend yield. Following its spin-off from Johnson & Johnson, the company retained its recognition as a Dividend King, which makes it one of the most promising dividend stocks. In July, it raised its quarterly dividend by 1.2% to $0.2075 per share. The stock has a dividend yield of 5.16%, as of October 8.
1. Energy Transfer LP (NYSE:ET)
Analyst Upside Potential as of October 8: 35.6%
Energy Transfer LP (NYSE:ET) is a North American diversified midstream energy company. With the growing need for reliable power in fast-expanding sectors like data centers, demand for natural gas is on the rise, and Energy Transfer appears well-positioned to benefit. The company already transports about 30% of all US natural gas, connecting key production regions to consumers and export hubs. Earlier this year, it signed a multiyear agreement with CloudBurst to supply natural gas to data centers supporting up to 1.2 gigawatts of power. In its latest investor presentation, the company also noted receiving requests to connect nearly 200 data centers to its network.
Energy Transfer LP (NYSE:ET) plans to invest $5 billion this year in expansion projects, including growth in the Permian Basin, the Hugh Branson pipeline aimed at serving Texas’ data center market, and the Nederland Flexport NGL terminal, which is the world’s second-largest natural gas liquids export site.
With its strong project pipeline and multiple growth opportunities, Energy Transfer LP (NYSE:ET) is well positioned to sustain dividend growth and continue delivering solid returns to shareholders. The company has already increased its payouts for 14 consecutive quarters and currently offers a quarterly dividend of $0.33 per share. As of October 8, the stock has a dividend yield of 7.92%.
While we acknowledge the potential of ET 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 ET and that has 100x upside potential, check out our report about this cheapest AI stock.
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