In this article, we are going to discuss the best Fortune 500 dividend stocks to invest in now.
Global equities delivered a strong run in 2025, but the gap between winners and laggards widened as the year went on. Expectations climbed along the way, setting up a market where staying power may matter more than short bursts of momentum in the year ahead.
CNBC noted that the MSCI All Country World Index, which tracks more than 2,500 large- and mid-cap stocks across developed and emerging markets, rose more than 21% for the year. It reached a record level of 1,024 on December 26, according to LSEG data.
In the US, stock gains were largely driven by earnings growth tied to artificial intelligence and steady consumer demand. That support held even as concerns about a potential AI bubble circulated, a view echoed by several major financial firms. Morningstar data showed that while US markets posted a comparatively modest 16% gain and trailed some global peers, both the S&P 500 and NASDAQ still climbed to new highs. Mega-cap technology companies led the way in that move.
State Street noted that heavy capital spending, particularly by technology and infrastructure-related companies, played a significant role in driving US stocks higher. This came as valuations stretched to levels well above historical norms.
Looking ahead to 2026, the tone remains positive, but with more caution. Goldman expects earnings to keep growing, helped by continued AI investment and a more supportive monetary backdrop. At the same time, it warned that elevated valuations and market concentration could limit further gains. State Street struck a similar note, calling the US the main driver of global equity returns, while stressing the need for selectivity as markets react more sharply to earnings results, policy changes, and any cooling in AI-related spending.
With that said, here are the Best Fortune 500 Dividend Stocks to Buy Now.
Photo by Dan Dennis on Unsplash
Our Methodology:
For this list, we scanned the top companies among the Fortune Global Rankings and identified dividend stocks. From that group, we shortlisted dividend stocks with an annual dividend yield of over 2%, as of December 31. Lastly, we picked 7 companies that were most popular among hedge funds at the end of Q3 2025, as per Insider Monkey’s database, and ranked them accordingly. The following are the Best Fortune 500 Stocks to Buy for Dividends.
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).
7. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 47
Dividend Yield as of December 31: 3.70%
Phillips 66 (NYSE:PSX) operates as a diversified, integrated downstream energy provider, manufacturing, transporting, and marketing refined products across its network.
On December 12, Mizuho raised its price target on Phillips 66 (NYSE:PSX) to $150 from $145 and kept a Neutral rating on the shares. The move came as part of the firm’s 2026 outlook for the exploration and production group. Sentiment around US oil and gas stocks remains weak, driven by concerns over oil oversupply and elevated gas storage levels. Even so, the analyst pointed to ‘underappreciated value’ across the group. Longer-term fundamentals, especially in exploration and production, may start to show through in 2026. Mizuho suggested shifting risk toward oil-focused E&Ps, with a selective approach to gas stocks, while taking a more neutral stance on refining.
A few days later, on December 15, Phillips 66 (NYSE:PSX)approved a $2.4 billion capital budget for 2026. The figure comes in slightly above this year’s forecast and reflects a shift in growth spending toward its midstream natural gas liquids network and higher-return refining projects. The plan reinforces Phillips 66’s focus on shareholder returns as it invests in assets designed to lift margins and cash flow across the integrated business, CEO Mark Lashier said.
In September, the company completed its acquisition of full ownership of WRB Refining from Cenovus Energy, a move expected to expand its crude processing flexibility. For 2026, capital spending for the midstream and refining segments is set at $1.1 billion each, compared with estimated outlays of $975 million and $822 million in 2025. Midstream investments include the Iron Mesa gas processing plant, a 300-million-cubic-feet-per-day facility in the Permian Basin scheduled to start up in the first quarter of 2027. The plan also covers an expansion of the Coastal Bend NGL pipeline, which is expected to lift capacity to 350,000 barrels per day by the fourth quarter of 2026.
In addition, Phillips 66 is planning a new fractionator in Corpus Christi that would add 100,000 barrels per day of NGL fractionation capacity. A final investment decision is expected in early 2026, with completion targeted for 2028.
6. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 55
Dividend Yield as of December 31: 2.23%
The Kroger Co. (NYSE:KR) operates as a food and drug retailer, running supermarkets, multi-department stores, and fulfillment centers across the United States.
On December 10, Citi analyst Paul Lejuez cut his price target on The Kroger Co. (NYSE:KR) to $68 from $74 and kept a Neutral rating on the stock.
Less than two weeks later, on December 23, Kroger’s board approved an additional $2 billion for share repurchases. This adds to the $7.5 billion program announced in December 2024. After the latest approval, the company has about $2.9 billion remaining under its buyback authorizations as of December 23, 2025. Management expects to fund these repurchases through operating cash flow and existing liquidity, while preserving its investment-grade credit rating.
Earlier in December, The Kroger Co. (NYSE:KR) narrowed its full-year sales outlook. Shoppers have become more selective, especially when it comes to groceries and fresh produce, and are relying more on promotions. The company also missed third-quarter sales estimates. Interim CEO Ron Sargent said the pressure is no longer limited to lower-income households, with middle-income shoppers now feeling the same strain.
Competition has intensified across the sector as larger rivals like Walmart and Target have cut prices to attract customers. Kroger responded by stepping up price reductions late in the quarter to hold on to budget-conscious shoppers. Behind the scenes, the company has been moving to reduce costs and reset parts of the business. The Kroger Co. (NYSE:KR) has closed facilities and cut jobs while reshaping its e-commerce strategy following the removal of CEO Rodney McMullen in March. As part of that shift, it plans to close three of the eight automated fulfillment centers developed with British partner Ocado. The change will result in a $2.6 billion charge as Kroger transitions to a hybrid fulfillment model and deepens partnerships with Instacart, DoorDash, and Uber Eats.
5. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 69
Dividend Yield as of December 31: 2.24%
Morgan Stanley (NYSE:MS) operates as a global financial institution, with businesses spanning investment banking, wealth management, and investment management.
On December 17, Keefe Bruyette raised its price target on Morgan Stanley (NYSE:MS) to $202 from $184 and kept a Market Perform rating on the stock. The update followed recent conferences and meetings with management, which led the firm to revise its estimates.
A few days later, a December 19 report from Reuters said Morgan Stanley is shaping up as a leading contender for a major role in SpaceX’s highly anticipated initial public offering. People familiar with the matter said the bank’s long-standing relationship with CEO Elon Musk gives it an advantage as decisions take shape.
The IPO selection process, described as a ‘bake-off,’ is still ongoing. A small group of banks, including Morgan Stanley, Goldman Sachs, and JPMorgan, is competing for roles. Sources cautioned that there is no guarantee Morgan Stanley will land the sought-after ‘lead left’ underwriting position.
Musk’s relationship with Morgan Stanley (NYSE:MS) stretches back at least 15 years, which is why many see the firm as the front-runner to lead the underwriting syndicate. That said, no final decisions have been made, and discussions remain fluid. The sources spoke on condition of anonymity due to the confidential nature of the talks. Morgan Stanley, Goldman Sachs, and JPMorgan declined to comment, and SpaceX did not respond to a request for comment.
4. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 76
Dividend Yield as of December 31: 2.01%
Wells Fargo & Company (NYSE:WFC) operates as a diversified, community-based financial services company, offering banking, insurance, investment, mortgage, and related services.
On December 18, Truist raised its price target on Wells Fargo & Company (NYSE:WFC) to $100 from $90 and kept a Buy rating on the stock. The update followed recent conference appearances by management, which led the firm to refresh its model. Truist also lifted its FY27 EPS estimate to $8.15 from $7.85, pointing to continued progress on the bank’s efficiency ratio, the analyst said in a research note.
Earlier in the month, a December 9 report from Reuters said Wells Fargo expects additional workforce reductions and higher severance costs in the fourth quarter. CEO Charlie Scharf said artificial intelligence is set to reshape how the bank operates.
Scharf described AI as extremely important, both for the efficiencies it can unlock and for ‘what it is going to potentially do to headcount’. He said AI would not fully replace people, but it will change how work gets done across the organization. He added that the anticipated decline in headcount reflects Wells Fargo’s broader push to operate more efficiently, echoing comments he made in an interview last month.
The bank plans to introduce AI tools gradually over the next year and beyond, positioning the shift as part of a longer-term efficiency effort. Scharf called the transition a ‘positive reality’ for Wells Fargo, while acknowledging that AI adoption is likely to result in some workforce reductions alongside meaningful opportunities in technology.
3. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 84
Dividend Yield as of December 31: 4.47%
AT&T Inc. (NYSE:T) operates as a major US telecommunications provider, connecting consumers and businesses through its national network. Its services span mobile wireless, including 5G and 4G, fiber and broadband internet, enterprise communications, and entertainment offerings.
On December 22, Citi lowered its price target on AT&T Inc. (NYSE:T) to $29 from $32 and kept a Buy rating on the stock. The firm expects the company to post ‘solid’ Q4 results and stay on track with its fiscal 2025 outlook. At the same time, Citi adjusted its valuation multiple, pointing to a more challenging wireless operating backdrop and the recent pullback across the sector.
Earlier in the month, on December 4, the Federal Communications Commission said it approved AT&T’s $1.02 billion purchase of certain wireless spectrum licenses from UScellular. The approval came after AT&T Inc. (NYSE:T) committed to ending its diversity, equity, and inclusion programs. The FCC noted that the transaction would lead to ‘enhancing AT&T’s network coverage, capacity, and performance, resulting in a better customer experience’.
The FCC has required telecom companies to end DEI programs as a condition for deal approvals since Donald Trump returned to office in January. AT&T had already agreed to wind down these initiatives as it worked to secure approval for the spectrum acquisition.
2. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 107
Dividend Yield as of December 31: 2.04%
Citigroup Inc. (NYSE:C) is a leading global bank for institutions with cross-border needs, a global provider in wealth management, and a U.S. personal bank.
On December 29, Citigroup Inc. (NYSE:C) said its board approved the sale of its Russian unit, AO Citibank, to Renaissance Capital. The transaction is expected to result in a pre-tax loss of about $1.2 billion, largely tied to currency translation. An SEC filing said the deal is slated to close in the first half of 2026.
Citigroup has weighed an exit from Russia for several years as US and EU sanctions intensified. Other lenders have taken similar steps. Earlier this year, Goldman Sachs Group Inc. received approval to sell its Russian business. The pullback began even before Vladimir Putin invaded Ukraine in 2022. That year, Citigroup said it would wind down consumer and local commercial banking in the country and halt nearly all institutional banking services. What remained were operations needed to meet certain legal and regulatory obligations, according to the bank.
Citigroup Inc. (NYSE:C) later reached an agreement with RenCap, one of Russia’s oldest investment banks, to sell the rest of its operations. In November, Putin signed an order allowing the deal to proceed.
The bank said the loss is largely due to currency-translation adjustments and cautioned that the figure could change if currency markets move. Citigroup made the following statement:
“The overall divestiture of the remaining business operations is expected to provide a benefit to Citi’s CET1 Capital, primarily driven by the deconsolidation of associated risk-weighted assets.”
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 140
Dividend Yield as of December 31: 2.66%
Topping our list of the Best Fortune 500 Dividend Stocks is UnitedHealth Group Incorporated (NYSE:UNH), a US-based multinational company focused on health insurance and healthcare services.
According to a December 19 report by Reuters, UnitedHealth Group Incorporated (NYSE:UNH) said audits conducted by outside consulting firms will lead to operational changes across its health services and pharmacy benefit units. The company said those changes will include more automation and greater standardization of internal processes.
CEO Stephen Hemsley pledged earlier this year to review the business after UnitedHealth Group Incorporated (NYSE:UNH) missed its own profit forecast for the first time since 2008. During the first-quarter earnings call, executives pointed to pressure from government reimbursement rates and an unfavorable mix of new patients at Optum Health as the main reasons for the shortfall.
UnitedHealth Group Incorporated (NYSE:UNH) delivers clinical services through Optum Health, operates the pharmacy benefit manager OptumRx, and runs the insurance arm UnitedHealthcare. One of the reviews, conducted by FTI Consulting, found that in some cases the company lacked standardized documentation. This included parts of its in-home health assessment program, which submits patient diagnoses used to calculate Medicare Advantage payments to providers. Hemsley said in a letter that UnitedHealth plans to share the results of the visit review in the first quarter of 2026.
UnitedHealthcare administers Medicare Advantage plans for seniors and people with disabilities on behalf of the government and has faced scrutiny over payments that Optum receives from the insurer. The company has denied any wrongdoing but disclosed in a July filing that it is cooperating with both criminal and civil investigations by the Justice Department related to its Medicare Advantage billing. FTI said its review did not assess legal compliance.
A separate report by Analysis Group focused on OptumRx and concluded that the pharmacy benefit unit could benefit from more standardized audit practices and expanded use of automation.
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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