In this article, we will take a look at the 5 Best Dividend Paying Stocks to Buy Right Now. For deeper discussion and analysis, read 15 Best Dividend Paying Stocks to Buy Right Now.
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5. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 98
Merck & Co., Inc. (NYSE:MRK) is one of the world’s largest healthcare companies, with a portfolio that spans prescription medicines, biologic therapies, vaccines, and animal health products.
Yet much of the investment story continues to revolve around Keytruda, the company’s blockbuster cancer treatment. The drug generated $32 billion in sales in 2025, accounting for nearly half of Merck’s total revenue. With US patent protection set to expire in 2028 and European patents following in 2030, investors have become increasingly focused on what comes next.
That looming patent cliff has weighed on the stock since 2024, as the market looks ahead to the eventual loss of exclusivity for Merck’s biggest product. The company has been moving to strengthen its pipeline before that happens. Earlier this month, Merck acquired Terns Pharmaceuticals, adding TERN-701, an experimental treatment for chronic myeloid leukemia. The drug remains in early-stage clinical testing, but its FDA breakthrough therapy designation highlights the potential management sees in the program.
Merck & Co., Inc. (NYSE:MRK) is not relying on a single successor to Keytruda. Its development pipeline includes more than 50 clinical trials, with over 30 programs already in Phase 3 studies and five candidates currently under FDA review. Management has repeatedly pointed to a pipeline capable of generating as much as $70 billion in annual revenue over time, helping offset the eventual decline in Keytruda sales. The challenge is timing, as those replacement products are not expected to reach that level of commercial scale until the middle of the next decade.
4. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 103
Chevron Corporation (NYSE:CVX) ranks among the world’s largest energy companies, with operations that span the full energy value chain. The company produces oil and natural gas, operates pipeline networks, and runs refining and chemical businesses across multiple markets.
Managing a business of that scale involves many moving parts, including hedging activities designed to reduce exposure to swings in commodity prices. Those strategies can help over the long term, but their impact does not always line up neatly with quarterly earnings results. That was the case in the first quarter, when Chevron’s hedging activities reduced earnings by $2.9 billion. While the company expects that impact to reverse in future periods, the short-term effect was that first-quarter results may have appeared weaker than the underlying business performance suggested.
Beneath the earnings figures, production trends painted a more encouraging picture. Chevron increased output during the quarter, supported in part by its acquisition of Hess. Another notable highlight came from the Permian Basin, where production exceeded one million barrels per day for the fifth consecutive quarter. Management’s primary focus in the region remains generating strong cash flow, though the company has indicated it could increase production if needed.
With the Hess integration still underway and already contributing to higher output, expanding Permian production was not a major priority. Even so, Chevron Corporation (NYSE:CVX) delivered strong growth. Global production rose 15% from a year earlier, while U.S. production climbed 24%. The gains came despite ongoing conflict in the Middle East, demonstrating the resilience of the company’s operations. As Hess becomes fully integrated into Chevron’s portfolio, the company could still have additional opportunities to grow production in the years ahead.
3. Linde plc (NASDAQ:LIN)
Number of Hedge Fund Holders: 104
Analysts grew more optimistic on Linde plc (NASDAQ:LIN) following the company’s first-quarter results and updated outlook. On May 5, BMO Capital raised its price recommendation on Linde to $560 from $545. It reiterated an Outperform rating on the shares after the company delivered an earnings beat. The firm views Linde as one of the stronger performers in the sector, supported by favorable pricing trends, healthy demand growth in the US, and improving conditions in the helium market. According to the analyst, those factors could help the company exceed its expectations for 2026.
The same day, RBC Capital also lifted its price goal on Linde, raising it to $570 from $552. It kept an Outperform rating on the stock.RBC described the quarter as largely in line with expectations but pointed to the company’s higher full-year 2026 guidance as an encouraging sign. The analyst said the updated outlook reflects expectations for low single-digit volume growth and high single-digit earnings-per-share growth. The firm noted that foreign exchange tailwinds are likely to fade during the second half of the year. Even so, Linde’s guidance does not appear to include any meaningful benefit from improving helium market conditions. If those trends continue, the company could move toward the upper end of its FY26 earnings guidance range of $17.60 to $17.90 per share.
Linde plc (NASDAQ:LIN) is a global industrial gases and engineering company headquartered in the United Kingdom. The company operates through four segments: Americas, EMEA, APAC, and Engineering.
2. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 113
Johnson & Johnson (NYSE:JNJ) and its subsidiaries develop, manufacture, and sell a broad range of healthcare products, giving the company a presence across multiple areas of the healthcare industry. The company’s dividend remains one of its biggest attractions for income-focused investors.
One way to assess the strength of a dividend is to compare it with the cash a company generates. Last year, Johnson & Johnson produced $20.4 billion in free cash flow and paid out $12.4 billion in dividends. That translates to a payout ratio of about 61%, a level that suggests the dividend remains well supported by the business.
The healthcare giant also maintains a strong balance sheet. As of the end of the first quarter, J&J held $21.7 billion in cash and cash equivalents, providing ample financial flexibility and supporting its ability to continue returning capital to shareholders.
Over the past decade, the company has delivered an average dividend yield of 2.7%, comfortably above the broader market average.
Investors are also keeping an eye on the company’s legal challenges tied to talcum powder products it previously sold. Those issues have created uncertainty and remain a concern for some shareholders. At the same time, Johnson & Johnson (NYSE:JNJ) has continued to operate from a position of strength. Its ability to manage those legal headwinds while continuing to execute across its diversified healthcare businesses highlights the resilience of the company and the durability of its underlying operations.
1. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 173
Broadcom Inc. (NASDAQ:AVGO) specializes in designing application-specific integrated circuits, or ASICs. Unlike general-purpose processors that are built to handle a wide range of computing tasks, ASICs are engineered for a single purpose. That specialization gives them a key advantage. Because they are designed to perform one specific function, ASICs can process workloads more efficiently, deliver higher performance, and consume less power than many traditional computing chips.
The growing demand for AI infrastructure has been a major tailwind for Broadcom. In the company’s latest quarter, AI-related revenue surged 106% from a year earlier to $8.4 billion, significantly outpacing its overall growth rate. The result underscored the strong demand for Broadcom’s custom AI processors, which have become an increasingly important part of its business.
Looking ahead, Broadcom has forecast fiscal second-quarter revenue of $22 billion. That guidance implies year-over-year revenue growth of about 47%, marking a notable acceleration from the pace recorded in the first quarter. Much of that growth is expected to come from continued demand for the company’s custom AI chips, which remain at the center of the ongoing buildout of AI infrastructure.
Broadcom CEO Hock Tan said in March that the company’s AI chip revenue is expected to reach $10.7 billion in the fiscal second quarter. If achieved, that would represent a 143% increase from the same period last year. The forecast highlights just how quickly demand has accelerated. For comparison, Broadcom’s AI chip revenue grew 46% in the prior-year quarter, a much slower pace than what the company is now projecting.
The rapid growth is being driven by a shift in how AI systems are being used. Inference, the process of running AI models and generating responses, is becoming the dominant workload in AI data centers. According to Deloitte, inference workloads are expected to account for about two-thirds of AI data center computing power in 2026, up from roughly 50% last year.
That trend is creating a growing need for custom AI processors, an area where Broadcom Inc. (NASDAQ:AVGO) has established a strong position. As more computing resources are directed toward inference tasks, demand for the company’s specialized AI chips continues to rise, providing another catalyst for growth.
While we acknowledge the potential of AVGO 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 AVGO and that has 100x upside potential, check out our report about the cheapest AI stock.
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