We recently compiled a list of the 14 Best Performing Dividend Stocks To Buy Now. In this article, we are going to take a look at where Dynex Capital, Inc. (NYSE:DX) stands against the other dividend stocks.

Dividend stocks have taken a backseat in the market as technology and AI-driven equities have soared to record highs. However, analysts at Ned Davis Research believe that a more challenging macroeconomic landscape this year could create opportunities for dividend stocks to regain momentum.

Amid concerns about economic growth and uncertainty surrounding former President Trump’s tariff policies, investors have been turning to defensive strategies. In this environment, dividend stocks have proven resilient, offering both stability and attractive passive income. The Dividend Aristocrat index, which tracks companies with a history of at least 25 years of consistent dividend growth, has climbed by over 5.3% in 2025. In contrast, the broader market has declined by nearly 1.7%, as of the close of March 7.

READ ALSO: 13 Best Cheap Dividend Stocks To Buy Right Now

While analysts remain cautious about the market’s ability to sustain its recent gains, dividend stocks have increasingly drawn their attention for several reasons. According to Ameriprise Financial, the S&P index is widely regarded as one of the most significant benchmarks for global equity markets. Over the past decade, dividend growth and share buybacks have become defining characteristics of the index, which includes numerous global dividend-paying companies. Dividend growth saw a sharp slowdown in the final quarter of 2024, largely attributed to the election and uncertainty surrounding potential policy changes. With these concerns now in the past, Ameriprise Financial expects a resurgence in dividend growth within the broader market. For 2025, projections indicate a potential 8% increase in dividend payouts, following growth rates of 6% in 2024 and 5% in 2023.

The report further mentioned that The Tax Cuts and Jobs Act (TCJA) of 2017 also played a significant role in boosting dividends and share buybacks in 2018. By lowering the corporate federal tax rate from 35% to 21%, the legislation contributed to a surge in shareholder returns, with buybacks and dividend payouts reaching multi-year highs the following year. As the TCJA approaches its expiration in 2025, discussions around corporate tax reductions have resurfaced. While the proposed decrease from 21% to 15% is not as substantial as the previous cut, it could still provide an upside for shareholder returns within the broader market once a final decision is reached.

Companies with a history of regular dividend payments are generally seen as stable investments, reflecting their strong cash flow and financial resilience. These businesses are often found in defensive sectors such as consumer staples, utilities, and healthcare, which tend to be less affected by economic fluctuations. As a result, they help investors manage portfolio risks more effectively. At the beginning of 2025, growing concerns over rising inflation and sluggish economic growth led investors to increase their exposure to defensive stocks. This shift in strategy was intended to protect portfolios from potential market volatility linked to these economic uncertainties.

Ned Davis’s Clissold and his team shared their perspective on the situation:

“One would expect that companies that pay dividends are more stable and have lower growth rates. As a result, they should rally less in up markets and decline less in down markets. In other words, they have lower betas than non-dividend-payers. … As a group, dividend-payers have a beta of 0.99 versus 1.11 for nonpayers.”

Our Methodology

For this article, we scanned the list of companies that have delivered positive returns in 2025. From that group, we identified dividend companies with strong dividend policies and stable cash positions. We began with a pool of fifty companies, narrowed it down by considering their share price increases, and ultimately selected the top 14 dividend stocks with the highest share price gains as of March 7, arranging them in ascending order of performance.

At Insider Monkey, we are obsessed with hedge funds. 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).

Dynex Capital, Inc. (NYSE:DX)

Year-to-Date Return as of March 7: 13.89%

Dynex Capital, Inc. (NYSE:DX) is an American real estate investment trust company that invests in mortgage-backed securities and other various real estate assets. The stock has surged by nearly 14% since the start of 2025 and its 12-month return came in at more than 15%. The company is still in the process of rebounding from the challenges faced between 2022 and 2023. These difficulties were primarily driven by elevated short-term interest rates, which increased interest expenses and put pressure on the trust’s book value. However, this trend is expected to shift, as mortgage REITs may become more appealing to passive income investors in a lower interest rate environment.

In the fourth quarter of 2024, Dynex Capital, Inc. (NYSE:DX) reported a total economic return of $0.13 per common share, equating to 1.0% of its starting book value. For the full year, the return stood at $0.99 per share, or 7.4% of the beginning book value. During the quarter, the company raised $64.4 million in equity capital through at-the-market (ATM) common stock issuances, bringing the total capital raised for the year, after issuance costs, to $332.0 million.

Dynex Capital, Inc. (NYSE:DX) demonstrated a solid cash position during the quarter as it had over $377 million available in cash and cash equivalents at the end of this period. On February 20, the company declared a 13.3% hike in its monthly dividend to $0.17 per share. The company has been making regular dividend payments to shareholders since 2008. In addition to its strong dividend policy, the stock also maintains an attractive dividend yield of 14.20%, as of March 7.

Overall DX ranks 8th on our list of the best performing dividend stocks to buy now. While we acknowledge the potential for DX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.