In this article, we will take a look at the 15 Best S&P 500 Dividend Stocks to Buy in 2026.
Dividend stocks have often provided stability when markets get difficult. Dan Lefkovitz, strategist for Morningstar Indexes, said leaning only on dividend payers tends to pull portfolios toward older, more traditional parts of the market.
He said adding companies that actively buy back their shares creates a mix that looks much closer to the broader market. Lefkovitz pointed to data showing that an index combining dividends and buybacks has delivered better returns than a high-dividend-only index over the past three years, even though it still lagged the overall US market.
Lefkovitz further said the difference comes down to how companies return cash to shareholders. Dividends are a long-term promise, and companies are careful about cutting them once established. Buybacks are more flexible and often increase when management believes the stock is undervalued. In recent years, large technology companies have led buyback activity. Dividend payments, meanwhile, remain concentrated in financials, utilities, energy, and consumer staples. That split has shaped performance as growth-driven sectors have taken the lead.
Lefkovitz added that income-focused investors may want to look outside the US. Dividend yields at home have slipped to around 1.1%, compared with yields above 3% in parts of Europe. At the same time, he cautioned that chasing the highest yields can backfire, as unusually high payouts often signal stress in a company’s business and the risk of future dividend cuts.
Given this, we will take a look at some of the best dividend stocks in the S&P 500.
Photo by Annie Spratt on Unsplash
Our Methodology:
For this list, we screened for S&P 500 companies with a market cap of at least $10 billion and identified stable dividend companies. From that group, we shortlisted stocks with dividend yields of around 2%, as of January 21. Finally, we picked 15 companies that were most popular among hedge funds, as per Insider Monkey’s database of Q3 2025.
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).
15. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 60
Dividend Yield as of January 21: 7.06%
On January 16, Bernstein cut its price target on Verizon Communications Inc. (NYSE:VZ) to $44 from $46, while sticking with a Market Perform rating. The firm said the industry looks like it is heading into a more aggressive phase of competition. Bernstein noted that through 2025, each quarterly update pointed to intensifying pressure, which ended up wiping out a big portion of the telecom gains seen in the first half of the year. At the same time, cable players continued to lose momentum in the second half, according to the firm. Bernstein expects this tougher competitive backdrop to carry into 2026 as well, with no clear signs of easing after recent strategic moves.
In other news, Reuters reported on January 15 that the California Public Utilities Commission approved Verizon’s $20 billion acquisition of fiber internet provider Frontier Communications, removing the last major hurdle for the deal to close that same day. As part of the approval, Verizon agreed to several conditions, including investing in 75,000 new fiber locations and constructing 25 new wireless towers to expand coverage in rural parts of California. Verizon also committed to additional broadband rollout requirements and pledged to provide free broadband service to many low-income households in the state for at least 10 years. Regulators added that Verizon will also expand its commitments to tribal communities under the agreement.
Verizon Communications Inc. (NYSE:VZ) operates as a holding company and, through its subsidiaries, delivers communication and technology services, along with information and streaming offerings, to consumers, businesses, and government customers.
14. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 62
Dividend Yield as of January 21: 3.05%
On January 20, Bernstein downgraded Amgen Inc. (NASDAQ:AMGN) to Market Perform from Outperform, while leaving its $335 price target unchanged. The firm said the decision was mainly driven by its view that “2026 is a waiting year” for MariTide. Bernstein also flagged a few new issues that could hang over the stock, including possible risk to Repatha as Merck’s (MRK) enlicitide pricing comes into focus. The analyst also noted there is still uncertainty around how meaningful Lp(a) outcomes could be, with more clarity expected only after investors can draw comparisons from Novartis’ (NVS) pelicarsen data.
Separately, on January 6, Amgen said it will acquire Dark Blue Therapeutics Ltd., a privately held biotech company based in the U.K. The transaction is valued at up to $840 million.
This deal strengthens Amgen’s oncology pipeline by adding an investigational small molecule aimed at degrading two proteins, MLLT1/3, which are believed to drive certain forms of acute myeloid leukemia (AML), a fast-moving blood cancer. Amgen pointed to encouraging preclinical results in leukemia models, showing anti-cancer activity and a mechanism that appears distinct from existing treatments. That differentiation could support both single-agent use and combinations, especially in cases where resistance becomes a problem and longer-lasting remission is the goal.
Amgen also said it plans to integrate Dark Blue into its existing research organization, which should further support its early-stage oncology discovery work.
Amgen Inc. (NASDAQ:AMGN) is a global biotech company focused on discovering, developing, manufacturing, and delivering innovative medicines for patients facing some of the world’s toughest diseases.
13. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 63
Dividend Yield as of January 21: 2.31%
On January 15, Citi kept its Neutral rating on QUALCOMM Incorporated (NASDAQ:QCOM) with a $180 price target after the stock moved under a new analyst’s coverage. The firm noted that Qualcomm shares are currently trading above their historical valuation levels.
Separately, Reuters reported on January 7 that Qualcomm is in discussions with Samsung Electronics about having Samsung manufacture two-nanometer chips on a contract basis. Qualcomm CEO Cristiano Amon was quoted by the Korea Economic Daily as saying the company is speaking with Samsung first, among a group of chip foundry partners, about producing chips using Samsung’s latest 2-nm process. He also said the design work has already been completed, with commercialization expected in the near future.
Qualcomm did not immediately respond to requests for comment outside regular business hours, while Samsung said it does not comment on specific customers.
QUALCOMM Incorporated (NASDAQ:QCOM) develops and commercializes core technologies that power much of the wireless communications industry.
12. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 66
Dividend Yield as of January 21: 2.39%
On January 14, Wells Fargo analyst Jason Kupferberg raised Accenture plc (NYSE:ACN)’s price target to $275 from $251. It maintained an Equal Weight rating on the stock.
The firm said its IT Services CIO Survey points to a neutral to modestly positive demand backdrop for 2026. Wells Fargo expects growth to remain largely stable, with some potential upside if discretionary spending improves. The analyst also noted that AI will likely be a net tailwind to Services revenues.
On January 6, Accenture announced it has agreed to acquire Faculty, a UK-based AI-native services and products business. The company said the deal will strengthen its ability to help clients reinvent core and critical business processes using safe and secure AI solutions that deliver tangible outcomes.
Faculty was founded in 2014 and has worked with both public and private sector clients to deploy AI solutions in the U.K. and other key markets. Its services include AI strategy, AI safety, and the design, build, and implementation of high-performance AI systems, supporting the scaled and safe adoption of AI across organizations.
Once the transaction closes, Faculty’s team of more than 400 AI-native professionals, including data scientists and AI engineers, will integrate with Accenture’s teams to expand AI capabilities for clients.
Accenture plc (NYSE:ACN) is a global professional services company, providing services and solutions across strategy and consulting, technology, operations, Industry X, and Song.
11. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 68
Dividend Yield as of January 21: 3.85%
On January 16, Barclays raised PepsiCo, Inc. (NASDAQ:PEP) price target to $148 from $144 and kept an Equal Weight rating on the stock. The firm updated price targets across the consumer staples group as part of its Q4 earnings preview. Barclays said the recent “enthusiasm” around PepsiCo shares reflects “a flight to safety.” At the same time, the analyst said the firm remains concerned about company- and sector-level fundamentals. Barclays also warned that oil and currency headwinds could show up in 2026, according to the research note.
In a separate development, a January 21 Reuters report said Engie has secured a 10-year agreement to supply biomethane for PepsiCo UK. Engie described it as the first deal of this kind between a biomethane producer and a food industry company in Britain.
Under the agreement, PepsiCo UK will purchase 60 gigawatt hours of biomethane each year from Engie’s newly built anaerobic digestion plant in Northern England. The facility is expected to start operating in the second half of 2027. Engie said it will deliver renewable gas equivalent to the annual consumption of about 5,000 households.
Britain’s Department for Energy Security valued the investment at £70 million ($94 million).
PepsiCo, Inc. (NASDAQ:PEP) is a global food and beverage company that manufactures, markets, and sells a large portfolio of snacks, drinks, and breakfast items, including major brands.
10. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 72
Dividend Yield as of January 21: 3.00%
On January 16, Stifel analyst Tore Svanberg raised Texas Instruments Incorporated (NASDAQ:TXN)’s price target to $200 from $170 and maintained a Hold rating on the stock. The update came as part of Stifel’s Q4 earnings preview for the analog, connectivity, and processors group. In the report, the firm said demand for analog chips appears to be coming back. At the same time, AI infrastructure spending remains solid, and edge AI is becoming “more of a reality,” according to the analyst.
Texas Instruments serves a wide range of end markets. One key area is AI-focused data centers, where its networking, power management, and thermal management semiconductors play an important role. The company also supplies products used in industries where AI is expected to have a larger impact over time.
Its chips are used across aerospace and defense, building and industrial automation, robotics, communications, and personal electronics. Many of these markets are expected to step up investment in AI features and integration in the coming years. In practice, that could mean more customers building AI into their systems, which may increase demand for analog semiconductors as products become more complex and require additional supporting components.
Texas Instruments Incorporated (NASDAQ:TXN) is a global semiconductor company that designs, manufactures, tests, and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment, and enterprise systems.
9. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 83
Dividend Yield as of January 21: 2.46%
On January 9, KeyBanc analyst Eric Gonzalez raised McDonald’s Corporation (NYSE:MCD) price target to $340 from $335 and maintained an Overweight rating on the stock. KeyBanc said Q4 2025 looked like a strong quarter for McDonald’s US. The firm believes the company executed well on its value strategy and used its marketing strengths to stand out during what it described as a choppy period for the broader fast-food industry.
Based on its proprietary data and recent conversations across the industry, KeyBanc expects McDonald’s US likely delivered same-store sales growth above consensus estimates. The firm also noted that Extra Value Meal subsidies appear to be coming in lower than expected, which could create upside to EPS.
In a separate January 7 CNBC report, Oppenheimer said McDonald’s shares have been stagnant for an extended period, creating what it sees as an attractive entry point for investors. The firm upgraded the stock to Outperform from Perform.
Analyst Brian Bittner also set a $355 price target, which implies about 17% upside from current levels. He described the setup as a “golden opportunity,” noting that the upgrade comes after he stayed on the sidelines for roughly two years. Bittner added that McDonald’s unit growth is being underestimated. He said the company has stayed on pace with its 4% growth target while many peers have fallen short. He also argued that consensus expectations do not fully reflect the strength of McDonald’s innovation pipeline. That includes the rollout of an updated beverage platform. Bittner further said the Street appears to be overlooking any stabilization or recovery in the low-end consumer.
McDonald’s Corporation (NYSE:MCD) is a global foodservice retailer operating across the US, International Operated Markets, and International Developmental Licensed Markets & Corporate segments.
8. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 87
Dividend Yield as of January 21: 2.88%
On January 14, UBS analyst Peter Grom cut The Procter & Gamble Company (NYSE:PG) price target to $161 from $176, while keeping a Buy rating on the stock. In his research note, he said the operating environment and market backdrop for Consumer Staples remain challenging, though fundamentals could start to improve in 2026.
Procter & Gamble stands out as a reliable dividend payer. The company’s payout ratio is around 60%, meaning it returns about 60% of its earnings to shareholders through dividends. That level matters because it shows the dividend is supported by earnings, rather than being funded through outside sources. With a 60% payout ratio, P&G still has room to keep raising its annual dividend over time.
This is not an artificial intelligence stock that can triple quickly in a bull market. Procter & Gamble is a mature blue-chip company. Still, it often fits well as a defensive holding because it sells everyday household products like paper towels, laundry detergent, and soap. These are items people continue buying even when budgets tighten, and in a recession, they usually become priorities, not optional spending.
The trade-off is growth. Consumer staples are not a high-growth category, and The Procter & Gamble Company (NYSE:PG)’s large size makes it harder to deliver major expansion. Single-digit revenue growth is typically the normal pace. Even so, for investors looking for stability, that slower growth may be acceptable, especially with the stock’s forward dividend yield sitting around 2.9%.
7. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 90
Dividend Yield as of January 21: 3.52%
On January 20, Jefferies analyst Edward Mundy moved Philip Morris International Inc. (NYSE:PM) to Hold from Buy and cut the firm’s price target to $180 from $220. In his note, he said Jefferies sees limited room for the stock to be re-rated in 2026. The analyst also pointed to tougher competition. He noted that British American Tobacco (BTI) is pushing category growth in US nicotine pouches, while Japan Tobacco is “competing more assertively” in heated tobacco. Because of that backdrop, Jefferies believes there is downside risk to consensus estimates for Philip Morris.
In a separate January 15 press release, Philip Morris International said it remains committed to investing in the US. The company stated it has invested more than $20 billion in America since 2022, with most of that tied to acquiring and expanding US manufacturing capabilities, commercial rights and infrastructure, and supporting US jobs.
The release noted that around $19 billion of these investments came in 2022, including the Swedish Match acquisition. PMI highlighted that Swedish Match generates the large majority of its revenues in the United States, and described the deal as a major part of its US investment strategy.
Since that acquisition, PMI US has invested more than $1 billion into American manufacturing, operational capabilities, and people costs through September 30, 2025. The company also pointed to infrastructure investments in Colorado, Kentucky, and North Carolina. PMI said these projects are expected to create more than 1,000 direct jobs and 1,500 indirect jobs, with an ongoing annual economic impact estimated at over $800 million.
Philip Morris International Inc. (NYSE:PM) is a global consumer goods company focused on building a smoke-free future. Over time, it has also been working to evolve its portfolio beyond tobacco and nicotine products.
6. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 92
Dividend Yield as of January 21: 3.11%
On January 20, TD Cowen analyst Steve Scala raised Merck & Co., Inc. (NYSE:MRK) price target to $120 from $100. The firm maintained a Hold rating. The analyst acknowledged that Merck is a strong and well-run company, but said it may be hard for the stock to stand out as a top pharma pick unless the company can deliver a clearer boost to its long-term growth outlook.
Merck has been trying to strengthen that growth story. On January 12, the company raised its projections for a new wave of growth drivers, saying it now expects these newer businesses to bring in around $70 billion in revenue by the mid-2030s. This comes as the company speeds up the rollout of additional drugs ahead of expected competition to its blockbuster cancer treatment Keytruda.
The updated outlook included higher expectations for several areas. Merck now believes its cardiometabolic and respiratory treatments could generate about $20 billion in sales, up from a prior estimate of $15 billion. It also sharply increased its forecast for infectious disease drugs, now expecting roughly $15 billion, compared with the earlier $5 billion estimate.
Meanwhile, Merck & Co., Inc. (NYSE:MRK) and Moderna shared encouraging results on January 20 tied to their experimental personalized cancer vaccine. The companies said the vaccine, when combined with Keytruda, continued to lower the risk of recurrence or death in high-risk melanoma patients even five years after treatment began. In the mid-stage trial involving patients who had already undergone surgery, the combo reduced the risk of recurrence or death by 49% after five years, consistent with the strong three-year data released back in 2023.
Merck & Co., Inc. (NYSE:MRK) is a global healthcare giant, best known for its prescription drugs and biologic therapies, vaccines, and animal health products.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 93
Dividend Yield as of January 21: 3.23%
On January 20, Berenberg raised its price target on AbbVie Inc. (NYSE:ABBV) to $275 from $270, while keeping a Buy rating on the stock. The firm said it is feeling more confident about AbbVie’s outlook, especially after lifting its forecasts for Skyrizi and Rinvoq, calling their growth trajectory “exceptional.”
In other news, on January 12, AbbVie drew attention again after news broke that the company had reached a three-year agreement with the Trump administration aimed at lowering drug prices in the US, according to Reuters. As part of the broader arrangement, AbbVie also committed to investing $100 billion over the next 10 years into US-based research and development.
AbbVie said the investment will also support manufacturing expansion and help grow its direct-to-patient platform, TrumpRx, which would offer commonly used medicines such as Alphagan, Combigan, Humira, and Synthroid through the company’s own websites. Under the deal, the company said it would receive exemptions from tariffs and future pricing mandates, though it added that the rest of the details are confidential. The agreement comes as the Trump administration has been putting pressure on drugmakers to bring down prices, pointing out that Americans often pay close to three times more for prescription drugs than people in other developed countries.
That said, the benefits of TrumpRx may not reach everyone. Most insured Americans already purchase medications through set co-pays or co-insurance, which are tied to the list price, meaning a direct-cash option may matter more for people paying out of pocket.
AbbVie Inc. (NYSE:ABBV) is a major global biopharmaceutical company, focused on developing and selling medicines across a wide range of therapeutic areas, backed by large-scale research, manufacturing, and commercialization operations.
4. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 93
Dividend Yield as of January 21: 3.10%
Reuters reported on January 15 that Exxon Mobil Corporation (NYSE:XOM) has brought in Shearwater Geoservices for a major 3D seismic survey offshore Trinidad and Tobago. Shearwater announced the deal the same day.
The work will focus on Exxon’s large deepwater block off Trinidad, which sits just north of Guyana’s Stabroek area, the oil discovery that has quickly turned Guyana into one of the fastest-growing producers in the world. The planned survey will map out about 6,000 square kilometers of seabed, and it’s expected to start in early 2026. The operation should run for around five months, in waters roughly 2,000 to 3,000 meters deep.
Exxon picked up the acreage after signing a production-sharing agreement with Trinidad’s government in August last year. The block itself was created by merging seven separate offshore blocks into one larger area. When the deal was signed, Exxon’s Global Exploration vice president, John Ardill, said the company wanted to use what it had learned about Caribbean geology to try to recreate its Guyana-style success in Trinidad’s waters.
He also said Exxon aims to move faster in Trinidad than it did in Guyana, mainly because a lot of equipment is already positioned across the border in Guyana, and Trinidad already has established energy infrastructure in place.
Exxon Mobil Corporation (NYSE:XOM), one of the biggest players in global energy, operates across the full oil and gas chain — from exploration and production to refining and selling fuels — while also producing petrochemicals, lubricants, and advanced materials.
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 103
Dividend Yield as of January 21: 2.43%
Johnson & Johnson (NYSE:JNJ) posted its fourth-quarter 2025 earnings on January 21 and followed it up with a 2026 outlook that came in ahead of Wall Street expectations. What stood out is that the guidance still looks strong even with a couple of big headwinds hanging over the business, such as a drug pricing deal with the Trump administration and about $500 million in tariff-related costs expected in its medical devices segment.
The company said the drug pricing agreement reached with President Donald Trump earlier this month, which is aimed at lowering prices for certain prescription medicines, could end up costing it “hundreds of millions of dollars.”
Even with that impact, the company is looking for 2026 sales of $99.5 billion to $100.5 billion. That’s higher than analysts were projecting at around $98.9 billion, based on LSEG data. On the earnings side, it expects full-year profit in the range of $11.43 to $11.63 per share, slightly above the Street’s $11.45 estimate.
CEO Joaquin Duato struck an optimistic tone on the earnings call, saying the company expects to grow faster in 2026 than it did in 2025. He also said they can already see a clear path toward reaching double-digit growth by the end of the decade.
Johnson & Johnson (NYSE:JNJ) and its subsidiaries operate across the healthcare space, developing and selling a wide range of products, including medicines and medical devices.
2. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 111
Dividend Yield as of January 21: 2.12%
On January 15, TD Cowen cut its price target on Bank of America Corporation (NYSE:BAC) to $64 from $66, while sticking with a Buy rating. The firm refreshed its model after BofA’s Q4 results came in better than expected. However, Cowen noted that management’s outlook for operating leverage landed toward the low end of what investors were hoping to hear, which took some shine off the beat.
Separately, Reuters reported on January 20 that Bank of America plans to hand out roughly $1 billion worth of equity to employees across the company, excluding senior management, after wrapping up a strong year fueled by a sharp jump in profits. The stock awards will total close to 19 million shares and mark the ninth year in a row that the bank has issued broad-based employee equity grants.
Earlier this month, BofA topped Wall Street’s expectations for fourth-quarter earnings. Trading desks benefited from volatile markets, while the bank also earned more from interest income. For the full year 2025, profit climbed to $30.5 billion, up from $27 billion the year before. The stock also had a strong run, ending the year up about 25%, which is its third straight year of gains.
Looking ahead, the broader banking industry is gearing up for another active year in dealmaking. Investment banking revenues could improve as big M&A activity picks up again and more large IPOs return to the market. On top of that, net interest income could get a boost if loan demand improves, especially with borrowing costs coming down and customers becoming more willing to take on debt.
Bank of America Corporation (NYSE:BAC) is one of the largest US financial institutions, with operations spanning consumer banking, wealth management, corporate banking, and global markets.
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 120
Dividend Yield as of January 21: 1.99%
On January 14, RBC Capital analyst Gerard Cassidy reiterated his Outperform rating on JPMorgan Chase & Co. (NYSE:JPM) and kept his $330 price target after the bank’s Q4 results. Cassidy said JPMorgan continues to put up best-in-class performance, supported by a diversified business mix and years of heavy investment. In his view, long-term spending has strengthened the bank’s balance sheet and helped build one of the most profitable and well-rounded banking models in the industry. He also noted JPMorgan appears well prepared for the Federal Reserve’s updated Basel III “endgame” proposal whenever it is released.
A few days later, Reuters reported on January 16 that JPMorgan had launched a new advisory group focused on helping companies and financial sponsors raise capital in private markets. The move reflects the bank’s push to expand further into alternative assets, which have remained one of the hottest areas in finance.
The new unit, called Private Capital Advisory & Solutions, will be led by Keith Canton, a JPMorgan veteran who joined the firm in 2015 and most recently ran its Americas equity capital markets team. The group will bring together JPMorgan’s private capital advisory work with its broader M&A expertise. Canton, who has more than 20 years of experience, will report to Viswas Raghavan and to Kevin Foley, the bank’s global head of capital markets.
Tilman Pohlhausen, who has led JPMorgan’s private capital advisory business in recent years, will oversee the effort globally under the new structure and report to Canton.
JPMorgan also continued to dominate on Wall Street, extending its streak as the world’s top investment bank and bringing in the highest fees in 2025, according to Dealogic data.
JPMorgan Chase & Co. (NYSE:JPM) is one of the largest financial institutions in the world, with operations spanning investment banking, consumer and small business banking, commercial banking, payments and transaction processing, and asset management.
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