In this article, we will take a look at some of the most reliable dividend stocks for maximum income.
Dividend-paying stocks are often preferred by investors because of the stable income they provide. They may not appear exciting at first, but a closer look reveals their true strength. Over the years, dividends have played a major role in boosting investor returns. According to a report by Hartford Fund, since 1960, about 85% of the cumulative total return of the S&P 500 Index has come from reinvested dividends and the power of compounding.
The report also pointed out that during the 1940s, 1960s, and 1970s, when total returns were below 10%, dividends made up a large share of overall gains. However, many investors make the mistake of focusing only on the highest-yielding stocks. Research by Wellington Management shows why this approach can be risky.
The study revealed that since 1930, stocks with the highest dividend payouts performed roughly in line with those offering high, but not extreme, dividends, although they took turns leading in different decades. Most analysts prefer stocks with dividend yields between 3% and 6%, since yields higher than this may indicate potential financial stress or risk. Given this, we will take a look at some of the best dividend stocks for maximum income.
Our Methodology:
For this list, we used a stock screener to identify companies with a history of dividend growth spanning over 10 years. From this group, we selected companies offering dividend yields of at least 2% as of October 13. The stocks are ranked according to their dividend yields.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. A. O. Smith Corporation (NYSE:AOS)
Dividend Yield as of October 13: 2.01%
A. O. Smith Corporation (NYSE:AOS) stands among the top manufacturers of residential and commercial water heaters, boilers, and water treatment systems. Around two-thirds of its revenue comes from North America, while most of the remaining share is generated in China.
In the US, A. O. Smith Corporation (NYSE:AOS)’s growth is supported by a strong economy and rising home prices. Since its products are closely tied to consumer spending and the housing market, a stable job market and higher disposable income often lead homeowners to invest in upgrades like new water heaters or filtration systems. This trend has helped the company maintain steady growth across the domestic market for much of the past decade.
Looking ahead, emerging markets, especially China, are expected to play a major role in fueling the company’s expansion. The country’s large population, growing middle class, and steady economic growth create a favorable environment for its products.
Holding a leading position in its industry gives A. O. Smith Corporation (NYSE:AOS) strong pricing power and solid profit margins. This advantage allows it to generate substantial cash flow, which it uses to fund innovation and develop new products. As a result, the company has been able to deliver consistent dividend growth over the years.
On October 13, A. O. Smith Corporation (NYSE:AOS) declared a 6% hike in its quarterly dividend to $0.36 per share. This was the company’s 33rd consecutive year of dividend growth, which makes AOS one of the best dividend stocks. The stock supports a dividend yield of 2.10%.
11. MGE Energy, Inc. (NASDAQ:MGEE)
Dividend Yield as of October 13: 2.26%
MGE Energy, Inc. (NASDAQ:MGEE) is a regulated utility based in Wisconsin that distinguishes itself through its solid financial health, disciplined capital management, and steady business model. This sets it apart from many other companies in the industry that face high debt levels, inflation-driven cash flow pressures, and tight regulatory pricing.
MGE Energy, Inc. (NASDAQ:MGEE)’s core mission is to provide dependable power while continuing to invest in modern energy infrastructure. It oversees essential utility operations and seeks growth by adding more renewable energy capacity and enhancing its electric grid.
In recent years, MGE Energy, Inc. (NASDAQ:MGEE) has placed greater emphasis on expanding its solar and battery storage facilities to meet tougher carbon-reduction targets. Its performance largely depends on favorable regulatory decisions, efficient cost control, and its ability to grow its rate base — the value of assets from which it earns profits while serving customers. The company has also set ambitious environmental goals, including phasing out coal by 2032 and achieving net-zero carbon electricity by 2050.
Moreover, MGE Energy, Inc. (NASDAQ:MGEE) has a long track record of rewarding shareholders, having increased its dividend for 50 consecutive years, which earned it the distinction of being recognized as a Dividend King. Moreover, it has paid dividends for 110 consecutive years, which makes it one of the best dividend stocks. Currently, it offers a quarterly dividend of $0.475 per share and has a dividend yield of 2.26%, as of October 13.
10. NIKE, Inc. (NYSE:NKE)
Dividend Yield as of October 13: 2.37%
NIKE, Inc. (NYSE:NKE), a global leader in footwear and apparel, has long been a defining force in both sports and popular culture. Known for its influence in fashion, athletic wear, and everyday street style, the company has maintained a strong presence for decades. However, in recent years, it has faced several hurdles that have slowed its momentum.
The brand became overly reliant on digital sales, straining relationships with key wholesale partners. At the same time, its lack of innovation, particularly in the running category, left room for competitors to gain ground. The fierce competition in the retail space has only intensified these challenges.
Recent financial results showed some signs of recovery, though NIKE, Inc. (NYSE:NKE) still has a way to go before reclaiming its past strength. Even so, the company remains committed to rewarding shareholders. In the first quarter, it distributed $591 million in dividends, marking a 6% increase from the previous year, and repurchased $123 million worth of shares, retiring 1.8 million shares in total.
These shareholder returns highlight NIKE, Inc. (NYSE:NKE)’s continued commitment to dividend growth despite the tough operating environment. The company has rewarded shareholders with growing dividends for the past 23 years and currently offers a quarterly dividend of $0.40 per share. The stock supports a dividend yield of 2.37%, as of October 13.
9. The Home Depot, Inc. (NYSE:HD)
Dividend Yield as of October 13: 2.42%
The Home Depot, Inc. (NYSE:HD) is a leading American multinational retailer specializing in home improvement, offering a wide range of tools, construction materials, appliances, and related products. While the housing market has been sluggish, it is expected to rebound eventually. When home sales, new construction, and renovations pick up again, the company is well-positioned to benefit, with the potential for stronger sales growth and higher operating margins.
Looking at The Home Depot, Inc. (NYSE:HD)’s recent performance, sales in the second quarter rose 4.9% compared to the same period last year, while earnings per share slipped slightly to $4.58 from $4.60. Although the numbers show a minor decline in profit, they remain solid considering what CEO Edward Decker described as “a bit of a frozen housing market.”
Despite ongoing challenges in the housing sector, The Home Depot, Inc. (NYSE:HD) still anticipates full-year sales growth of 2.8% and expects to maintain an operating margin of around 13%. This level of profitability supports its dividend comfortably, with a payout ratio of roughly 62%, indicating that the company’s dividend remains well-covered by its earnings. HD has already been growing its dividends for 15 consecutive years, which makes it one of the best dividend stocks to invest in. The company’s quarterly dividend comes in at $2.30 per share and has a dividend yield of 2.42%, as of October 13.
8. Cisco Systems, Inc. (NASDAQ:CSCO)
Dividend Yield as of October 13: 2.43%
Cisco Systems, Inc. (NASDAQ:CSCO) is a global leader in networking and communications technology, known for its broad range of products, services, and technical support. Its core operations revolve around networking and communications — a vital but relatively mature segment of the tech industry. While this area remains essential, much of the current excitement in technology has shifted toward faster-growing fields like semiconductors, artificial intelligence, and quantum computing.
In recent years, Cisco Systems, Inc. (NASDAQ:CSCO) has concentrated its strategy on five key priorities: embedding AI into all product lines, expanding its global reach, strengthening cybersecurity, building out data and AI infrastructure, and delivering customer-centric advisory services. The company’s progress relies on continuous innovation, responsiveness to regional market trends, improved security offerings, advanced data-processing capabilities, and a stronger focus on flexible service models and client support.
Beyond its operational strategy, Cisco Systems, Inc. (NASDAQ:CSCO) also stands out for its dependable shareholder returns. The company has increased its dividend for 18 consecutive years, underscoring its commitment to steady and reliable income growth. Currently, it offers a quarterly dividend of $0.41 per share and has a dividend yield of 2.43%, as of October 13.
7. Illinois Tool Works Inc. (NYSE:ITW)
Dividend Yield as of October 13: 2.63%
Illinois Tool Works Inc. (NYSE:ITW) is a major force in the global industrial manufacturing sector, with operations spread across seven business segments that include automotive components, food service equipment, and other specialized products. The company focuses on product areas that offer above-average growth potential within their markets and continuously refines its business model to stay competitive. It also pursues steady expansion through bolt-on acquisitions that strengthen its market presence.
One of Illinois Tool Works Inc. (NYSE:ITW)’s greatest strengths lies in its competitive edge. The company enjoys a wide economic moat, supported by an extensive intellectual property portfolio of more than 17,000 granted and pending patents, which helps it maintain a strong position against competitors.
In addition, Illinois Tool Works Inc. (NYSE:ITW)’s decentralized and entrepreneurial structure allows its individual business units to operate with significant independence, tailoring their strategies to meet customer needs more effectively. Alongside its operational strengths, the company also maintains a consistent and reliable dividend record, reflecting its financial stability and long-term focus. It is a Dividend King with 53 consecutive years of dividend growth under its belt, which makes it one of the best dividend stocks to invest in. Currently, it offers a quarterly dividend of $1.61 per share and has a dividend yield of 2.63%, as of October 13.
6. NextEra Energy, Inc. (NYSE:NEE)
Dividend Yield as of October 13: 2.69%
NextEra Energy, Inc. (NYSE:NEE) is a rapidly expanding power producer, generating much of its energy from renewable sources and supplying it to utility companies across different regions. The company’s foundation lies in the consistent demand for electricity, along with the growing global shift toward clean energy, both of which contribute to its reputation as a blue-chip stock.
As one of the largest utility firms in the US, and among the world’s leading renewable energy producers, NextEra Energy, Inc. (NYSE:NEE) also benefits from its base in Florida, a state experiencing strong population growth and rising adoption of solar power.
Over the past two decades, NextEra Energy, Inc. (NYSE:NEE) has increased its dividend at an impressive compound annual rate of around 10%, contributing to an overall annual return exceeding 15%. While its dividend yield is lower than many of its peers, the consistent rate of dividend growth more than offsets that. Looking ahead, the company expects to raise its dividend by about 10% per year through at least 2026, extending its track record of 29 consecutive years of dividend increases. It currently offers a quarterly dividend of $0.5665 per share and has a dividend yield of 2.69%, as of October 13.
5. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of October 13: 2.72%
Johnson & Johnson (NYSE:JNJ) operates as a global healthcare leader, focusing primarily on pharmaceuticals and medical devices. Its operations are divided into two main segments: Innovative Medicine, which develops and markets prescription drugs, and MedTech, which produces medical devices.
Up until 2023, Johnson & Johnson (NYSE:JNJ) also managed a thriving consumer health division known for well-known products like Tylenol and Band-Aid. That segment was later separated into a standalone company called Kenvue.
With a history spanning more than a century, Johnson & Johnson (NYSE:JNJ) has built a reputation for continuous innovation and resilience. It has managed to stay competitive through changing markets, patent expirations, economic downturns, and even global health crises.
Financially, Johnson & Johnson (NYSE:JNJ) continues to generate substantial cash flows that support both reinvestment and shareholder returns. In 2024 alone, it allocated $17 billion toward research and development while distributing $118 billion in dividends, underscoring its strength as a reliable dividend-paying stock. The company has been growing its dividends for 63 consecutive years and currently offers a quarterly dividend of $1.30 per share. The stock has a dividend yield of 2.72%, as of October 13.
4. American States Water Company (NYSE:AWR)
Dividend Yield as of October 13: 2.76%
American States Water Company (NYSE:AWR) operates as a diversified utility firm with multiple subsidiaries across three main segments: water, electric, and contracted services.
In recent years, the company has focused on strengthening its regulated operations, upgrading water and electric infrastructure, and aligning with evolving climate and environmental standards. Its performance largely depends on favorable regulatory outcomes, the consistency of government contracts, and its ability to meet customer demand amid growing environmental challenges.
American States Water Company (NYSE:AWR) is well-regarded among income-focused investors for its outstanding dividend history. The company paid dividends every year since 1931 and has increased them annually for 71 consecutive years, one of the longest records in the industry. Over the past five years, it has maintained a compound annual growth rate (CAGR) of 8.5% in its quarterly dividend since the third quarter of 2020 and is on track to reach a 10-year CAGR of about 8.3% by 2025. Looking ahead, the company aims to sustain long-term annual dividend growth above 7%. AWR offers a quarterly dividend of $0.504 per share and has a dividend yield of 2.76%, as of October 13.
3. Texas Instruments Incorporated (NASDAQ:TXN)
Dividend Yield as of October 13: 3.24%
Texas Instruments Incorporated (NASDAQ:TXN) has long been known for producing chips used in consumer electronics, vehicles, and industrial systems. Recently, the company has begun to see encouraging growth from the data center segment, which could boost its stock performance, which has declined by over 6% in 2025 so far. Over the years, the company has built a strong reputation for efficiency and stability, maintaining high profit margins that highlight its advantage in designing analog and embedded chips used for tasks such as power management.
In recent times, however, Texas Instruments Incorporated (NASDAQ:TXN) has faced challenges. Most of its end markets are in various stages of recovery, while demand in the automotive segment continues to lag. After nine straight quarters of declining revenue, the company finally posted two consecutive quarters of year-over-year growth, including a 9% increase from the previous quarter.
Rising demand from data centers reinforces Texas Instruments Incorporated (NASDAQ:TXN)’s edge in analog and embedded chip manufacturing, particularly in areas like power conversion and signal processing. This growing strength could enable the company to maintain healthy cash flows and continue supporting its steady dividend growth. On September 18, it declared a 4.4% hike in its quarterly dividend to $1.42 per share. This marked the company’s 22nd consecutive year of dividend growth, which makes TXN one of the best dividend stocks on our list. The stock has a dividend yield of 3.24%, as of October 13.
2. Archer-Daniels-Midland Company (NYSE:ADM)
Dividend Yield as of October 13: 3.31%
Archer-Daniels-Midland Company (NYSE:ADM) is a global leader in agricultural processing and trading, supplying key ingredients for food, animal feed, and biofuels. The company not only grows major crops such as soybeans, corn, and wheat but also drives innovation within the industry. Its contributions include the creation of textured vegetable protein and advancements in products like high-fructose corn syrup, ethanol, and Omega-3 fatty acids.
Over time, Archer-Daniels-Midland Company (NYSE:ADM) has built a strong competitive edge. As the world’s largest corn processor, it benefits from significant economies of scale and operational efficiency in both production and distribution. Its innovation centers play a vital role in research and development, helping the company adapt to evolving consumer needs and refine its processing methods. In addition, ADM’s extensive global transportation and distribution network gives it a clear advantage over competitors.
This strong infrastructure and efficient business model allow Archer-Daniels-Midland Company (NYSE:ADM) to maintain high profitability, even during industry slowdowns. These strengths have also supported a consistent record of dividend growth. The company has paid dividends for 93 consecutive years and holds the title of Dividend King, having raised its dividend for 51 straight years. The quarterly dividend comes in at $0.51 per share and has a dividend yield of 3.31%, as of October 13.
1. Community Financial System, Inc. (NYSE:CBU)
Dividend Yield as of October 13: 3.35%
Community Financial System, Inc. (NYSE:CBU) is a regional financial holding company with operations spread across four key areas: banking, employee benefits services, insurance services, and wealth management. It serves customers throughout Upstate New York, North Eastern Pennsylvania, Vermont, and Western Massachusetts, providing traditional banking, lending, benefits administration, and financial advisory services through its network of subsidiaries.
Community Financial System, Inc. (NYSE:CBU)’s strategy focuses on maintaining a balanced mix of revenue streams, expanding its footprint across new markets, and pursuing acquisitions to strengthen both its market position and product range. Its success largely depends on stable deposit growth, prudent lending practices, strong asset quality, effective cost control, and disciplined capital allocation that supports consistent dividend growth.
Community Financial System, Inc. (NYSE:CBU) has raised its dividend for 33 consecutive years, reflecting a long-standing commitment to shareholder returns. Over the past decade, it has distributed more than $750 million in dividends, underscoring its focus on delivering sustainable long-term value to investors. The company pays a quarterly dividend of $0.47 per share and has a dividend yield of 3.35%, as of October 13.
While we acknowledge the potential of CBU 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 CBU and that has 100x upside potential, check out our report about this cheapest AI stock.
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