In this article, we will take a look at the 16 Best Dividend Stocks with Rising Payouts.
CNBC reported that investors trying to protect themselves from risks tied to artificial intelligence may want to look at dividend-paying stocks, according to Jenny Harrington, CEO of Gilman Hill Asset Management. She said dividend stocks have been performing well this year as investors shift away from large-cap tech names and move back into more traditional sectors. The iShares Select Dividend ETF has risen nearly 11% year to date, while the Schwab US Dividend Equity ETF is up about 15%. Meanwhile, the S&P 500 has stayed largely flat.
Harrington said investors are beginning to see that the gap in performance and valuations between big tech and older economy stocks had become “irrationally wide.” That realization is now pushing many to rebalance their portfolios. Tech valuations remain elevated, and at the same time, some industries face growing concerns about disruption from artificial intelligence. Earlier this month, software stocks fell after Anthropic released a new AI model that appeared capable of handling legal tasks and building software, work that companies would normally pay licensing fees for.
In this environment, Harrington said she is focusing on companies that are less exposed to AI disruption. “Even if people lose jobs en masse, they’re still buying toilet paper and diapers,” she said.
Given this, we will take a look at some of the best dividend stocks.
Our Methodology:
For this list, we start by filtering dividend-paying companies with market caps of at least $2 billion. From that group, we picked companies that have been growing their dividends for 10 consecutive years or more. Then, we identified companies with payout ratios for the trailing twelve-month period beloww 60%. From the final dataset, we picked 16 companies that were most popular among hedge fund investors, as per Insider Monkey’s database of Q3 2025. The stocks were ranked in ascending order of their hedge fund investors.
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).
16. Illinois Tool Works Inc. (NYSE:ITW)
Number of Hedge Fund Holders: 39
Payout Ratio (TTM): 59.2%
On February 9, Barclays analyst Julian Mitchell raised his price target on Illinois Tool Works Inc. (NYSE:ITW) to $275 from $244. The analyst reiterated an Underweight rating on the stock. He said the company’s outlook showed “some encouragement,” pointing to a few positive signs despite the cautious rating.
Earlier, on February 3, Illinois Tool Works posted fourth-quarter results that came in ahead of Wall Street expectations. The company benefited from steady demand for automotive parts and its ongoing efforts to reduce the impact of tariffs. Investors responded positively, with the stock climbing about 5% in early trading. The company has been working to offset tariff pressure by shifting more production closer to its customers and introducing selective price increases. These steps helped improve operating margins across all seven of its business segments. At the same time, higher new vehicle prices have led many consumers to hold on to their cars longer, increasing demand for maintenance and repair services. This trend supported growth in the company’s automotive aftermarket business.
The Automotive OEM segment, which remains the company’s largest revenue driver, brought in $827 million during the quarter, up from $785 million a year earlier. Overall, Illinois Tool Works reported earnings of $2.72 per share for the quarter ended December 31, compared with $2.54 per share last year. This result came in above analysts’ expectations of $2.68 per share, according to LSEG.
Revenue also increased to $4.09 billion from $3.93 billion a year ago, slightly ahead of analyst estimates of $4.07 billion. Looking ahead, the company expects 2026 earnings per share to range between $11 and $11.4. However, the midpoint of this forecast is slightly below analysts’ current estimate of $11.26 per share.
Illinois Tool Works Inc. (NYSE:ITW) is a diversified global manufacturer serving multiple industries. Its business includes Automotive OEM, Food Equipment, Test & Measurement and Electronics, Welding, Polymers & Fluids, Construction Products, and Specialty Products.
15. Church & Dwight Co., Inc. (NYSE:CHD)
Number of Hedge Fund Holders: 44
Payout Ratio (TTM): 36.87%
On February 13, Rothschild & Co Redburn analyst Edward Lewis upgraded Church & Dwight Co., Inc. (NYSE:CHD) to Neutral from Sell. The analyst also raised his price target to $91 from $81 on the stock. He explained that the firm’s earlier cautious view was based on expectations that growth would slow, which did not seem fully reflected in the stock’s premium valuation at the time. With the valuation now more reasonable, the firm said it had become more comfortable with the shares.
Earlier, on January 30, Church & Dwight reported quarterly results that came in ahead of Wall Street expectations. The company benefited from steady demand across both affordable and premium household products, including laundry detergent and personal care items. This steady demand helped support earnings even as consumer conditions remained uneven.
The company also said it expects its gross margin to expand by about 100 basis points in 2026 compared with last year. That outlook reflects ongoing efforts to improve efficiency and strengthen profitability. Consumer goods companies across the US have been adjusting to a more cautious consumer environment. Inflation remains elevated, and economic uncertainty has made shoppers more selective. In response, companies like Church & Dwight have focused on product innovation, increased promotions, and more aggressive marketing to maintain sales momentum.
Over the past year, Church & Dwight has reshaped its business. It exited several slower-growing areas, including dietary supplements, Flawless grooming tools, and Waterpik showerhead products. These moves allowed the company to focus more on categories with stronger growth potential, particularly those that offer both value and premium options.
The company reported adjusted earnings of 86 cents per share for the fourth quarter, ahead of analysts’ estimate of 84 cents per share, according to LSEG data.CEO Rick Dierker said the company’s balanced mix of value and premium products, along with disciplined operations, helped it gain market share in several categories. This progress came even as the broader consumer and economic environment remained mixed.
Church & Dwight Co., Inc. (NYSE:CHD) develops, manufactures, and sells a range of household and personal care products. It also operates in specialty areas related to animal and food production, as well as chemicals and cleaning products.
14. Tractor Supply Company (NASDAQ:TSCO)
Number of Hedge Fund Holders: 46
Payout Ratio (TTM): 43.96%
On January 30, TD Cowen lowered its price recommendation on Tractor Supply Company (NASDAQ:TSCO) to $53 from $55. It reiterated a Hold rating on the shares. The firm said the company is facing a difficult operating environment, which is putting pressure on comparable sales and margins. While softer fourth-quarter results were already expected, weaker comps and pressure on gross margins stood out as key negatives.
The day before, on January 29, Tractor Supply issued a weaker-than-expected outlook for annual sales and profit. Demand for heavy-duty farming equipment in the U.S. remains soft, as ongoing economic uncertainty continues to weigh on customer spending. The company also missed Wall Street expectations for fourth-quarter net sales. CEO Hal Lawton said the results reflected a shift in consumer behavior. Customers are still spending on essential products, but they are pulling back on discretionary items. This shift has made growth harder to sustain across certain categories.
Tariffs have added another layer of pressure. Higher import costs pushed the company’s gross margin slightly lower, to 35.1% from 35.2% a year ago. To deal with these cost increases, Tractor Supply raised prices on some products. At the same time, it introduced promotions on other items to support customers who are being more careful with their spending.
Looking ahead, the company expects fiscal 2026 net sales to grow between 4% and 6%. This is below analysts’ average estimate of 6.3% growth, which would bring sales to $16.61 billion, according to LSEG data. Its earnings outlook also fell short, with projected earnings per share between $2.13 and $2.23, compared with analyst expectations of $2.31. For the quarter ended December 27, Tractor Supply reported net sales of $3.90 billion, up about 3% from a year ago but slightly below estimates of $4 billion. Comparable store sales rose just 0.3%, missing expectations of a 2.28% increase. Net income also declined, falling 3.8% year over year to $297.7 million.
Tractor Supply Company (NASDAQ:TSCO) is a rural lifestyle retailer that serves recreational farmers, ranchers, and rural communities across the United States. It operates stores under the Tractor Supply Company and Petsense by Tractor Supply names, offering products that support everyday rural living.
