In this article, we will take a look at some of the best up-and-coming dividend stocks to invest in.
S&P Global reported that the first half of 2025 marked the strongest start to a year for US IPO activity by deal count since 2021, which saw 227 offerings. This year’s first half recorded 102 IPOs compared with 78 over the same period last year, reflecting a much stronger tone heading into the second half. There had already been growing optimism in the market by December 2024, although uncertainty around tariffs did slow issuance in the first quarter of 2025.
One of the best indicators of future IPO volume is how recently listed companies have been performing. Activity picked up meaningfully from late May through the end of the quarter, with new listings showing strong returns. Circle’s $1.2 billion IPO stood out, surging 168% on its first trading day and maintaining solid momentum afterward.
A separate Reuters report noted that IPOs from insurance companies hit a two-decade high this year as investors gravitated toward businesses seen as more insulated from President Donald Trump’s trade war. Their steady cash flows and durable business models also encouraged private equity firms to bring more of their portfolio companies to market, offering investors relative stability while other sectors were disrupted by rising tariffs, persistent inflation, labor market challenges, and geopolitical volatility.
Dealogic data shows that insurance-related IPOs on US exchanges reached their highest level since 2005.
Given this, we will take a look at some of the best up-and-coming stocks to buy.
Our Methodology:
For this list, we used Finviz stock screener to compile a list of the top stocks that went public in the last 5 years and identified companies that also pay dividends to shareholders. From that list, we picked 14 companies with upside potential of over 10%, based on analysts’ price targets as of November 21. 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
14. Enact Holdings, Inc. (NASDAQ:ACT)
Upside Potential as of November 21: 10.02%
Enact Holdings, Inc. (NASDAQ:ACT) is among the best up-and-coming stocks to invest in.
JPMorgan’s Richard Shane trimmed his price target on Enact Holdings, Inc. (NASDAQ:ACT) to $39 from $40 on November 7, keeping a Neutral view after the company’s third-quarter update, according to a report by The Fly.
For Q3 2025, Enact Holdings, Inc. (NASDAQ:ACT) posted $ 311.4 million in total revenue, slightly higher than the $309.5 million recorded a year earlier. Premiums came in at $244.6 million, compared with $249 million in the same period last year. As of September 30, the company was holding $339 million in cash and cash equivalents and another $311 million in invested assets. Management suggested that the combined figure was basically unchanged from the previous quarter, noting that buybacks and the regular dividend largely offset the contribution from its EMICO subsidiary.
New insurance written reached $14 billion for the quarter, a 6% increase from Q2 2025 and 3% higher than the same period in 2024. Of that volume, monthly premium policies made up 97%, while purchase originations accounted for 93%. Primary insurance in force edged up to $272 billion, compared with $270 billion in the prior quarter and $268 billion a year ago. Enact Holdings, Inc. (NASDAQ:ACT) continued to emphasize shareholder returns, distributing $31 million in dividends during the period.
Enact Holdings, Inc. (NASDAQ:ACT) is known as a major private mortgage insurer in the US, supporting lenders by backing mortgage loans and helping more borrowers access homeownership.
13. DT Midstream, Inc. (NYSE:DTM)
Upside Potential as of November 21: 10.2%
DT Midstream, Inc. (NYSE:DTM) is one of the best up-and-coming stocks to invest in.
Morgan Stanley lifted its price target on DT Midstream, Inc. (NYSE:DTM) to $137 from $126 on November 12, while maintaining an Underweight stance, as reported by The Fly. The adjustment came as the firm updated its estimates following what it described as a “relatively in-line midstream and renewable infrastructure” Q3 earnings stretch.
DT Midstream, Inc. (NYSE:DTM) reported Adjusted EBITDA of $288 million for the quarter, up $11 million from Q2. Performance in the pipeline segment was broadly steady, while the gathering segment improved by $10 million thanks to stronger Haynesville volumes. The company also trimmed its 2025 growth capital outlook to between $385 million and $415 million and is projecting year-end leverage of roughly 3.1x.
Management raised its distributable cash flow guidance to a range of $800 million to $830 million, lifting the midpoint by $45 million on the back of lower spending on maintenance, reduced interest costs, and lighter cash taxes. The company also reiterated plans to increase dividends by 5% to 7% annually, keeping the third-quarter payout at $0.82 per share.
DT Midstream, Inc. (NYSE:DTM) operates a broad network of natural gas pipelines, storage infrastructure, gathering systems, compression assets, and related surface facilities across interstate and intrastate markets.
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