5 Best S&P 500 Stocks to Buy for Dividends

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1. Union Pacific Corporation (NYSE:UNP)

Number of Hedge Fund Holders: 96

Dividend Yield as of June 23: 2.13%

Topping our list of the Best S&P 500 Dividend Stocks is Union Pacific Corporation (NYSE:UNP). The company connects 23 western US states, providing efficient railroad transportation, freight shipping, logistics, and rail safety services.

Union Pacific Corporation (NYSE:UNP) held an investor conference last week in which the company reiterated its key financial and operating assumptions for the year. The firm is expecting inflation, excluding fuel, for the year to be around 4% compared with 2025, while depreciation is forecasted to rise by 4% YoY. Moreover, it is projecting merger-related costs of about $25 million per quarter and a tax rate of approximately 24%.

Union Pacific Corporation (NYSE:UNP) also reaffirmed its capital expenditure target of about $3.3 billion for 2026. The investment will go toward infrastructure replacement, capacity and commercial facilities, technology investments, and locomotive and equipment upgrades.

Union Pacific management also outlined the company’s volume outlook across business segments for the year. The railroad operator remains optimistic in areas such as grain and grain products exports, supported by soybeans and renewable fuels policy clarity. Moreover, it is expecting growth in industrial chemicals and plastics tied to new business wins and plant expansions.

While we acknowledge the potential of UNP 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 UNP and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 12 Most Profitable American Stocks to Buy in 2026 and 14 Best S&P 500 Stocks to Buy Now According to Analysts

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