In this article, we will take a look at stocks for a dividend stock portfolio.
As retirement nears, maintaining financial security becomes a top priority for investors. One appealing strategy involves investing in dividend-paying stocks, which offer dependable and steady income through regular payouts from a company’s earnings.
Dividend stocks are particularly suited for retirees, as they tend to provide a buffer during market downturns. Morningstar noted that dividend-focused funds were better positioned during the tech crash from 2000 to 2002, largely due to their limited exposure to the sector. While the Vanguard Total Stock Market Index dropped nearly 44% during that period, driven by heavy losses in growth stocks, dividend stock funds saw losses of only about a third of that amount.
David Giroux, a portfolio manager at T. Rowe Price who leads the firm’s capital appreciation strategy, discussed the value of dividend stocks in an interview with Barron’s. He made the following comment:
“To have a retirement portfolio that has a significant component of stocks with attractive dividends makes a tremendous amount of sense. If the average company in the market can grow its earnings at 7% to 8% a year, your dividends should be growing at a similar rate.”
Given this, we will take a look at some of the best stocks for a dividend stock portfolio.
Image by Alexsander-777 from Pixabay
Our Methodology
For this list, we used a screener to select dividend stocks that have shown strong and consistent dividend policies and are spread across various industries, making them suitable for a retirement stock portfolio. From the initial selection, we chose ten stocks, each from a different industry, that were famous among the hedge fund investors, as per Insider Monkey’s Q1 2025. The stocks are ranked according to hedge funds having stakes in them.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 32
Realty Income Corporation (NYSE:O) is one of the best stocks for a dividend stock portfolio. On June 10, the company announced a slight increase in its monthly cash dividend on common stock, raising it from $0.2685 to $0.2690 per share.
This dividend will be paid on July 15, 2025, to shareholders of record as of July 1, 2025. The adjustment brings the annualized dividend to $3.228 per share, up from $3.222.
Sumit Roy, Realty Income Corporation (NYSE:O)’s President and Chief Executive Officer, made the following comment:
“The quality and diversification of Realty Income’s portfolio allows us to provide investors reliable monthly dividends that increase over time. I’m pleased to share that today’s declaration marks the 131st dividend increase since our NYSE listing 30 years ago. During times of market uncertainty, Realty Income remains committed to delivering investors predictable income streams.”
A member of the S&P index and the S&P Dividend Aristocrats index, Realty Income Corporation (NYSE:O) was founded in 1969 and owns a diversified portfolio of over 15,600 commercial properties across all 50 US states, the U.K., and six additional European countries as of March 31, 2025. The company is recognized for its consistent monthly dividends, having declared 660 in a row, with annual increases for the past 30 years.
9. T. Rowe Price Group, Inc. (NASDAQ:TROW)
Number of Hedge Fund Holders: 36
T. Rowe Price Group, Inc. (NASDAQ:TROW) is among the dividend stocks for a dividend stock portfolio. On June 11, the company reported that its preliminary assets under management (AUM) totaled $1.62 trillion as of May 31.
The firm also saw net outflows of $4.4 billion during May, offering a snapshot of recent investor activity and the company’s current market standing.
T. Rowe Price Group, Inc. (NASDAQ:TROW) is also known for its reliable dividend payments. It has been rewarding shareholders with growing dividends for the past 39 consecutive years. Currently, it pays a quarterly dividend of $1.27 per share and has a dividend yield of 5.34%, as of June 11.
Established in 1937, T. Rowe Price Group, Inc. (NASDAQ:TROW) supports individuals and institutions in reaching long-term financial goals. Recognized for its strong investment performance, retirement expertise, and in-house research, the company operates with a client-first approach rooted in a culture of integrity.
TROW has surged by over 1% in the past week.