In this article, we will take a look at some of the best dividend stocks that outperform the S&P 500.
Dividend stocks are typically considered for long-term investing, but they often lag behind the S&P 500, which today is largely driven by high-profile tech companies. The S&P 500 Dividend Aristocrats Index, which tracks companies with at least 25 consecutive years of dividend growth, has returned more than 5.4% so far this year, compared with a 16.2% return for the broader market. In 2025, the broader market is once again taking the lead, leaving dividend stocks behind.
According to Trivariate Research, there has not been much for dividend investors to celebrate recently. The yield on the S&P 500, currently around 1.15%, is approaching its lowest level in 50 years, founder Adam Parker noted in a November research note. The only time it fell lower was to 1.09% during the tech bubble. Parker attributed this primarily to the dominance of megacap tech companies in the index.
Despite this, some dividend-paying companies, including those in the tech sector, are outperforming the market. Investors recognize the long-term appeal of these equities and use them to maintain stable earnings. Analysts suggest that investors focus on companies with consistent dividend growth rather than simply high yields, as these dividends are more likely to be supported by strong cash flow and may increase steadily over time, creating a compounding effect for income streams.
Given this, we will take a look at some of the best dividend stocks that outperform the S&P 500.
Our Methodology:
For this list, we scanned companies delivering substantial returns this year, and outperforming the S&P 500, which has returned 16% YTD. From that group, we selected companies with strong dividend histories and solid balance sheets. We then ranked the stocks based on their YTD returns.
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. Marathon Petroleum Corporation (NYSE:MPC)
Year-to-Date Returns as of December 3: 36.19%
Marathon Petroleum Corporation (NYSE:MPC) is among the best dividend stocks that outperform the S&P 500.
Barclays lifted its price target on Marathon Petroleum Corporation (NYSE:MPC) to $202 from $194 on November 17 while reiterating an Overweight stance. The firm updated its estimates after incorporating the latest commodities data.
Marathon Petroleum Corporation (NYSE:MPC) had released its third-quarter 2025 results earlier in November, reporting $1.4 billion in net income attributable to the company, which worked out to $4.51 per diluted share. Management noted that the Refining and Marketing segment generated solid cash flow during the quarter. They also pointed out that actions taken in the Midstream business were aimed at strengthening the portfolio and supporting a steady pace of mid-single-digit adjusted EBITDA growth.
According to the company, MPLX is set to deliver about $2.8 billion in annualized distributions to Marathon Petroleum, a level they expect will cover dividends and standalone capital spending while also supporting broader capital allocation priorities, something they viewed as a competitive advantage. In addition, the company’s integrated value chains and broad geographic footprint continue to shape its capital deployment strategy.
For 2025, the Refining and Marketing unit’s capital spending plan calls for ongoing high-return projects at the Los Angeles, Galveston Bay, and Robinson refineries. Alongside these longer-term programs, the company is moving ahead with shorter-cycle initiatives aimed at improving margins and lowering costs.
Marathon Petroleum Corporation (NYSE:MPC) is an American company involved in petroleum refining, marketing, and transportation and is based in Findlay, Ohio.
14. Expedia Group, Inc. (NASDAQ:EXPE)
Year-to-Date Returns as of December 3: 42.29%
Expedia Group, Inc. (NASDAQ:EXPE) is one of the best dividend stocks to beat the S&P 500.
On November 24, BNP Paribas Exane’s Nick Jones began covering Expedia Group, Inc. (NASDAQ:EXPE), assigning the stock a Neutral rating.
Expedia Group, Inc. (NASDAQ:EXPE) has already reported solid momentum for the third quarter of 2025. Revenue increased 9% from a year earlier to $4.4 billion, and total gross bookings climbed 12% to $30.7 billion. The company attributed the gains to strong growth in international room nights and a renewed pickup in its US business. Its B2B segment stood out once again, with B2B revenue rising 18% on the back of a 26% increase in gross bookings.
Given these results and the travel industry’s ongoing strength, Expedia Group, Inc. (NASDAQ:EXPE) raised its full-year sales guidance. Management now expects revenue to grow between 6% and 7%, above the earlier projection of 3% to 5%. The company also announced a quarterly dividend of $0.40 per share on November 7, continuing the expansion it introduced with a 17.6% dividend increase earlier in the year.
Expedia Group, Inc. (NASDAQ:EXPE) is a global travel technology company that operates well-known online travel brands, including Expedia.com, Hotels.com and Vrbo, helping customers arrange flights, lodging, car rentals, and travel activities.
13. Johnson & Johnson (NYSE:JNJ)
Year-to-Date Returns as of December 3: 42.6%
Johnson & Johnson (NYSE:JNJ) is among the best dividend stocks that beat the S&P 500.
Barclays lifted its price target on Johnson & Johnson (NYSE:JNJ) to $197 from $176 on December 2 while maintaining an Equal Weight rating. The firm also refreshed its estimates for the company.
Johnson & Johnson (NYSE:JNJ) continues to benefit from a strong balance sheet, a foundation that has long supported consistent stability and allowed the company to make substantial investments in research and development as well as targeted acquisitions. Its latest move was the purchase of Halda Therapeutics in a $3.05 billion deal aimed at expanding its oncology pipeline. The acquisition gives J&J access to Halda’s platform for developing oral cancer treatments, aligning with its broader focus on cutting-edge therapeutics.
Johnson & Johnson (NYSE:JNJ) remains strategically centered on high-margin, innovation-driven categories within its Innovative Medicine unit, including oncology, immunology, and neuroscience. Its MedTech arm is concentrated on faster-growing markets such as surgical robotics and digital surgery. For the third quarter, J&J posted net sales of $24 billion, a year-over-year increase of 6.8%, while net income surged 91% to $5.2 billion.
Johnson & Johnson (NYSE:JNJ) is a global healthcare company operating across two core segments: Innovative Medicine and MedTech.
12. General Motors Company (NYSE:GM)
Year-to-Date Returns as of December 3: 43.39%
General Motors Company (NYSE:GM) is one of the best dividend stocks that outperforms the S&P 500.
Mizuho raised its price target on General Motors Company (NYSE:GM) to $78 from $67 on November 19 while reiterating an Outperform rating. The move followed what the analyst described as strong third-quarter results and an improved 2026 outlook tied to lower tariff expectations and the industry’s shift away from earlier electric-vehicle timelines.
The broader view on EV adoption has shifted. It has become more apparent that electric vehicles will not replace traditional combustion models as quickly as Wall Street once believed. Softer consumer demand, combined with the Trump administration’s removal of the $7,500 EV tax credit, has created a clear tailwind for companies like General Motors Company (NYSE:GM).
These factors helped push GM’s third-quarter performance above expectations and supported an increase in guidance. Quarterly revenue slipped 0.3% to $48.6 billion but still exceeded the $45.33 billion consensus. Adjusted earnings per share came in at $2.80, down from $2.96 a year ago yet ahead of the $2.32 estimate. General Motors Company (NYSE:GM) also lowered its projected gross tariff impact for the year to a range of $3.5 billion to $4.5 billion, compared with the earlier $4 billion to $5 billion estimate. At the same time, full-year adjusted EPS guidance was raised to $9.75 to $10.50, up from the previous range of $8.25 to $10.
General Motors Company (NYSE:GM) designs, manufactures, and sells a wide range of vehicles and automotive parts.
11. Cummins Inc. (NYSE:CMI)
Year-to-Date Returns as of December 3: 44.2%
Cummins Inc. (NYSE:CMI) is among the best dividend stocks to beat the S&P 500.
On November 25, Argus raised its price target on Cummins Inc. (NYSE:CMI) to $573 from $459 while maintaining a Buy rating. The firm noted that as one of the largest independent diesel engine manufacturers, the company stands to benefit from high refined and distillate fuel costs compared with natural gas, as well as from increasingly strict environmental regulations in the US and abroad. The analyst also highlighted the company’s track record of navigating challenging economic conditions, which could become relevant under recently enacted tariff and trade legislation.
Cummins Inc. (NYSE:CMI) reported third-quarter sales of $8.3 billion, down 2% from the same period in 2024. The decline was mainly due to weaker demand for North American heavy and medium-duty trucks, with unit volumes falling 40% year over year. These declines were largely offset by strength in global power generation markets, higher light-duty truck volumes, and favorable pricing.
In October 2025, Cummins Inc. (NYSE:CMI) announced a partnership to test one of its prototype hydrogen-powered internal combustion engines in an intercity bus from Turkish-Japanese automaker Anadolu Isuzu. The engine matches the performance of a natural gas engine while producing significantly lower emissions.
Cummins Inc. (NYSE:CMI) is a global power solutions company producing advanced diesel, natural gas, electric, and hybrid powertrains, as well as related components.
10. Steel Dynamics, Inc. (NASDAQ:STLD)
Year-to-Date Returns as of December 3: 49.7%
Steel Dynamics, Inc. (NASDAQ:STLD) is one of the best dividend stocks to outperform the S&P 500.
On November 24, Bank of America raised its price target on Steel Dynamics, Inc. (NASDAQ:STLD) to $185 from $155 while maintaining a Buy rating. The firm noted it is updating its price forecasts for North American metals and mining stocks under coverage.
Steel Dynamics, Inc. (NASDAQ:STLD) delivered a strong third-quarter 2025 performance. The company set a record with 3.6 million tons of steel shipments and reported revenues of $4.8 billion. Adjusted EBITDA came in at $664 million, supported by robust operating cash flow of $723 million. Its steel fabrication segment posted sequential gains, with volumes rising 12%, and order activity remained steady. Management noted that the backlog now extends through the first quarter of 2026.
Looking ahead, fourth-quarter aluminum operations are expected to record losses of about $40 million, an improvement from the third quarter. Capital expenditures for Q4 are projected at around $200 million, with early 2026 CapEx estimates ranging from $500 million to $600 million. Management expressed confidence in reaching a 75% utilization rate for aluminum operations by the end of 2026 and expects an optimized product mix by 2027.
Steel Dynamics, Inc. (NASDAQ:STLD) is an industrial metals solutions company that produces steel, recycles metal, and fabricates steel products.
9. Albemarle Corporation (NYSE:ALB)
Year-to-Date Returns as of December 3: 50.3%
Albemarle Corporation (NYSE:ALB) is among the best dividend stocks to beat the S&P 500.
On December 2, Baird upgraded Albemarle Corporation (NYSE:ALB) to Neutral from Underperform and raised its price target to $113 from $81. The firm attributed the recent share rally to optimism around lithium demand for energy storage. While Baird is easing its bearish view, it remains cautious due to uncertainties around competitive dynamics and limited visibility. The analyst noted that demand appears to be improving, particularly in the stationary storage segment.
Albemarle Corporation (NYSE:ALB) reported strong third-quarter 2025 results, with revenues of $1.3 billion, beating estimates by $27.65 million. Adjusted EBITDA rose 7% to $226 million, reflecting better fixed cost absorption and ongoing cost-saving initiatives. The company remains on track to achieve full-year run-rate cost and productivity improvements of around $450 million, exceeding its initial target of $300–$400 million.
Cash flow remained robust, with third-quarter cash from operations at $356 million, up 57% or $128 million year over year. Year-to-date cash from operations reached $894 million, up 29% or $202 million, driven by cost and productivity gains, effective cash management, and a customer prepayment received in January. Albemarle Corporation (NYSE:ALB) expects to generate positive free cash flow of $300–$400 million for the full year 2025.
In addition, on October 27, the company announced agreements to sell its stakes in Ketjen and the Eurecat joint venture, which are expected to generate combined pre-tax proceeds of approximately $660 million.
Albemarle Corporation (NYSE:ALB) is one of the world’s largest lithium producers, operating lithium refining facilities in the US, Chile, and China.
8. Cencora, Inc. (NYSE:COR)
Year-to-Date Returns as of December 3: 56.03%
Cencora, Inc. (NYSE:COR) is one of the best dividend stocks to beat the S&P 500.
On November 11, JPMorgan raised its price target on Cencora, Inc. (NYSE:COR) to $417 from $344 while maintaining an Overweight rating, following an update to the company’s financial model.
On November 5, Cencora, Inc. (NYSE:COR) announced plans to invest $1 billion through 2030 to strengthen its US supply chain, alongside reporting Q4 FY25 results that surpassed Street expectations. The investment responds to growing demand for specialty drugs, including obesity and cancer therapies, which require more complex storage and handling, according to The Wall Street Journal.
For fiscal Q4 2025,Cencora, Inc. (NYSE:COR) posted revenue of $83.7 billion, representing 5.9% growth year over year. During the year, the company advanced several strategic initiatives to reinforce its position in healthcare, including expanding its specialty segment through the acquisition of RCA and strategically refocusing its existing business portfolio. The company also raised its quarterly dividend by 9% to $0.60 per share.
Cencora, Inc. (NYSE:COR) raised its long-term guidance, projecting adjusted operating income growth of 6% to 9% and adjusted EPS growth of 9% to 13%.
Cencora, Inc. (NYSE:COR) is a global pharmaceutical solutions company that distributes medications and provides services supporting the healthcare industry.
7. Applied Materials, Inc. (NASDAQ:AMAT)
Year-to-Date Returns as of December 3: 61.9%
Applied Materials, Inc. (NASDAQ:AMAT) is among the best dividend stocks to outperform the S&P 500.
On December 2, Morgan Stanley raised its price target on Applied Materials, Inc. (NASDAQ:AMAT) to $273 from $252 on the back of strong growth expectations, while maintaining an Overweight rating. The firm kept its 2026 wafer fab equipment (WFE) forecast largely unchanged at $129 billion, reflecting 11% year-over-year growth, and lifted its 2027 WFE projection to $145 billion, up 13% year over year. The analyst highlighted that the company is positioned for “two very strong years of growth,” supported by DRAM demand and TSMC’s investments.
In its Q3 2025 earnings release, Applied Materials, Inc. (NASDAQ:AMAT) noted that AI adoption continues to drive significant investment in advanced semiconductors and wafer fab equipment, marking the company’s sixth consecutive year of fiscal growth. Management emphasized that the company is well positioned at key technology inflection points in the fastest-growing market segments, extending its leadership in leading-edge logic, DRAM, and advanced packaging as next-generation technologies move into volume production in the coming years.
Applied Materials, Inc. (NASDAQ:AMAT) generated nearly $8 billion in cash from operations and $5.7 billion in free cash flow, while capital spending totaled $2.3 billion, primarily for the new EPIC Center. The company also returned $1.4 billion to shareholders through cash dividends. The company has consistently raised dividends for eight consecutive years, and over the past decade through 2024, its dividend per share has grown at a compound annual growth rate of around 15%, with nearly 90% of free cash flow returned to shareholders.
Applied Materials, Inc. (NASDAQ:AMAT) provides the equipment, services, and software required by the semiconductor and display industries to manufacture chips and advanced displays.
6. Welltower Inc. (NYSE:WELL)
Year-to-Date Returns as of December 3: 62.9%
Welltower Inc. (NYSE:WELL) is one of the best dividend stocks to outperform the S&P 500.
On November 20, Morgan Stanley raised its price target on Welltower Inc. (NYSE:WELL) to $200 from $170 while maintaining an Overweight rating. The analyst cited strong third-quarter results and favorable supply-demand dynamics in senior housing, noting increased confidence in the company’s ability to drive margin expansion.
Welltower Inc. (NYSE:WELL) continued to invest heavily in growing its portfolio. In the third quarter, the company completed $1.9 billion in pro rata gross investments, including $1.8 billion in acquisitions and loan funding and $96 million in development projects. In addition, as of October 27, 2025, the company had $23 billion in transaction activity either closed or under contract, anchored by $14 billion in pro rata gross investments, largely tied to the acquisition of senior housing communities in the US and U.K.
Welltower Inc. (NYSE:WELL) also remains attractive from a dividend perspective. On October 27, it declared a quarterly dividend of $0.74 per share, marking its 218th consecutive quarterly dividend. The company ended the quarter with $6.8 billion in cash and cash equivalents.
Welltower Inc. (NYSE:WELL) is a real estate investment trust (REIT) focused on healthcare and wellness properties, primarily in the United States, Canada, and the United Kingdom.
5. Broadcom Inc. (NASDAQ:AVGO)
Year-to-Date Returns as of December 3: 64.4%
Broadcom Inc. (NASDAQ:AVGO) is among the best dividend stocks that outperform the S&P 500.
On December 1, Morgan Stanley raised Broadcom Inc. (NASDAQ:AVGO)’s price target to $443, keeping an Overweight rating, and expects the company to outpace Nvidia in AI processor revenue growth in 2026 due to supply constraints. While customers worry about Nvidia product availability, including Vera Rubin, TPU has proven a strong alternative, though the firm notes it is “worth keeping in mind that Nvidia just did a $51 bn data center quarter, roughly 14x TPU revenues.”
Broadcom Inc. (NASDAQ:AVGO) has established itself as a key player in the global AI infrastructure landscape. Its custom accelerators (XPUs), high-speed Ethernet networking products, and VMware Cloud Foundation private cloud platform are now widely used by hyperscalers and AI labs to handle large-scale AI workloads.
Broadcom Inc. (NASDAQ:AVGO) is set to release its fourth-quarter and fiscal year 2025 results on December 11, an event that could influence 2026 expectations and the stock’s future performance. Management has indicated that AI revenue is expected to grow even faster than the estimated 50% to 60% year-over-year increase in fiscal 2025, driven by strong demand for its custom accelerators from three major hyperscaler clients and a rapid ramp-up at a fourth.
Broadcom Inc. (NASDAQ:AVGO) designs, develops, and supplies a broad portfolio of semiconductor and infrastructure software products for data center, networking, broadband, wireless, storage, and enterprise software markets.
4. CVS Health Corporation (NYSE:CVS)
Year-to-Date Returns as of December 3: 75.5%
CVS Health Corporation (NYSE:CVS) is one of the best dividend stocks to outperform the S&P 500.
On November 13, Wells Fargo analyst Stephen Baxter lowered the firm’s price target on CVS Health Corporation (NYSE:CVS) to $102 from $103 while maintaining an Overweight rating. The analyst noted that Q3 results were generally solid, though the bullish outlook for the Health Care Benefits (HCB) segment in 2025 is somewhat tempered by a steeper Part D medical loss ratio. Wells Fargo’s 2025 EPS estimate was raised, while the 2026 estimate remains unchanged and slightly above CVS’s guidance baseline.
CVS Health Corporation (NYSE:CVS) has faced several challenges in recent years but is gradually adapting to evolving industry demands and implementing initiatives aimed at improving margins and profitability. The company now offers online pharmacy ordering and same-day delivery, allowing patients to skip the line. In addition, it has committed to cost reductions over the coming years and has already made measurable progress.
CVS Health Corporation (NYSE:CVS) continues to expand its primary care operations, highlighted by acquisitions such as Oak Street Health in 2023. It also launched Cordavis, a partnership with biosimilar drugmakers to reduce drug costs and improve accessibility. CVS Health’s diversified and complementary healthcare businesses support its position as a leading company in the sector.
CVS Health Corporation (NYSE:CVS) is a diversified healthcare company operating as both a healthcare provider and a pharmacy benefit manager.
3. NRG Energy, Inc. (NYSE:NRG)
Year-to-Date Returns as of December 3: 76.9%
NRG Energy, Inc. (NYSE:NRG) is one of the best dividend stocks to outperform the S&P 500.
On November 20, Morgan Stanley raised its price target on NRG Energy, Inc. (NYSE:NRG) to $145 from $144 while maintaining an Equal Weight rating. The firm noted that it is updating price targets for Regulated and Diversified Utilities/IPPs in North America, highlighting that utilities underperformed the S&P’s return in October.
NRG Energy, Inc. (NYSE:NRG) reported strong third-quarter 2025 results, with revenue reaching $7.64 billion, up 5.7% from the same period last year. The company provided standalone 2026 guidance (excluding the LS Power portfolio) in line with its long-term growth targets. During the quarter, the company expanded its data center power agreements, bringing total contracted capacity to 445 megawatts and rapidly growing its development pipeline to 5.4 gigawatts.
CEO Lawrence Coben emphasized that NRG Energy, Inc. (NYSE:NRG) performed well across all business segments, prompting a $100 million increase in 2025 financial guidance in late September, which was reaffirmed on the earnings call. The LS Power acquisition remains on track for completion in the first quarter of 2026, with all regulatory filings submitted and financing secured on favorable terms.
NRG Energy, Inc. (NYSE:NRG) is an integrated energy company that produces and sells electricity and natural gas while providing related home and business services across the United States and Canada.
2. Corning Incorporated (NYSE:GLW)
Year-to-Date Returns as of December 3: 79.2%
Corning Incorporated (NYSE:GLW) is one of the best dividend stocks to outperform the S&P 500.
On November 21, UBS raised its price target on Corning Incorporated (NYSE:GLW) to $109 from $100 while maintaining a Neutral rating.
In the third quarter of 2025, Corning Incorporated (NYSE:GLW) reported core revenue of $4.27 billion, surpassing management’s forecast of $4.2 billion and marking 14% growth from the same period last year, an acceleration from the 12% growth reported in the second quarter.
This strong performance was largely driven by Corning Incorporated (NYSE:GLW)’s optical communications segment, which posted $1.65 billion in revenue, up 33% YoY. Enterprise optical communications revenue surged 58%, fueled by robust AI-related demand. The segment also delivered $295 million in net income, a 69% increase, benefiting from higher prices that boosted profit margins. Optical communications accounted for more than half of the company’s total core profit of $585 million, underscoring the growing importance of AI to the company’s business.
Corning Incorporated (NYSE:GLW) develops and manufactures specialty materials grounded in glass, ceramic, and optical physics.
1. Micron Technology, Inc. (NASDAQ:MU)
Year-to-Date Returns as of December 3: 174.2%
Micron Technology, Inc. (NASDAQ:MU) is among the best dividend stocks to beat the S&P 500.
On November 24, Morgan Stanley raised its price target on Micron Technology, Inc. (NASDAQ:MU) to $338 from $325 while maintaining an Overweight rating. The analyst noted that while memory stocks have recently declined amid concerns about higher capital spending and easing shortages, these factors do not change the firm’s positive outlook. Reports of tightening memory supply suggest very strong earnings ahead, making the recent selloff appear unwarranted.
Micron Technology, Inc. (NASDAQ:MU) is scheduled to release its fiscal 2026 first-quarter results on December 17. Management has guided for $12.5 billion in revenue for the quarter, representing a 45% increase from the same period last year. Non-GAAP earnings are expected to reach $3.75 per share, more than double the $1.79 reported in the year-ago quarter.
This robust growth is being driven by a favorable demand-supply environment in the memory market, fueled by AI. Chip designers are increasingly integrating high-bandwidth memory (HBM) into AI chips to boost computing power and reduce latency. Micron Technology, Inc. (NASDAQ:MU) recently announced plans to invest 1.5 trillion yen ($9.6 billion) in a production facility in western Japan to manufacture AI-focused chips. The move, aimed at diversifying advanced chip production away from Taiwan, will focus on next-generation HBM chips, which are essential components for AI computing.
Micron Technology, Inc. (NASDAQ:MU) designs, develops, and manufactures memory and storage products, including DRAM and NAND flash memory, which are used in a wide range of applications.
While we acknowledge the potential of MU 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 MU and that has 100x upside potential, check out our report about this cheapest AI stock.
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