We recently published a list of 8 Unstoppable Dividend Stocks to Invest in. In this article, we are going to take a look at where JPMorgan Chase & Co. (NYSE:JPM) stands against other unstoppable dividend stocks to invest in.
On December 27, the Magnificent Seven tech stocks declined by 3.1%, driven by the rising popularity of China’s DeepSeek, which uses cost-effective technology, tempering expectations for increased AI-related spending. The broader market also dropped 1.5%. While the long-term potential of DeepSeek remains uncertain, the market’s nervous response highlights the fragile state of the two-year-old bull market. Stocks, which recently reached record highs, are now trading at price-to-earnings ratios not seen since the 1990s. According to analysts, for investors seeking stability amid market volatility, dividend stocks may offer an appealing alternative to bonds, providing strong yields without some of the recent challenges facing the fixed-income market.
Dividend stocks underperformed in 2024 as the ongoing AI boom and growing enthusiasm for tech stocks drew investor attention elsewhere. The Dividend Aristocrats index, which tracks the performance of companies with at least 25 consecutive years of dividend growth, trailed the broader market during the year. Despite this, analysts are confident about the long-term prospects of dividend stocks. Their optimism stems from the strong cash reserves held by many US companies, which provide a solid foundation for maintaining or increasing dividend payments. According to the Wells Fargo Investment Institute, large-cap US companies collectively hold over $2.4 trillion in cash, offering ample potential to initiate or boost dividends.
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Dividend growth stocks often appeal to investors because they signal a company’s long-term commitment and financial strength. Regular dividend payments typically require profitability, reliable returns, and steady cash flow, making them a strong indicator of a company’s quality. Companies that consistently raise their dividends demonstrate their ability to maintain earnings, which often reflects greater resilience during economic or market challenges. Research shows that dividend-paying companies within the broader market have historically been more profitable than those that do not distribute dividends.
In line with this investor preference, many US companies have been increasing their payouts and establishing dividend policies. By September 30, 2024, approximately 80% of companies in the Index were paying dividends, a figure unchanged from a decade ago. Notably, the technology sector now accounts for 24% of these dividend-paying companies, up from 13% ten years prior, according to Franklin Templeton. Other sectors, such as healthcare and industrials, have also seen a rise in the number of companies offering dividends.
Since the beginning of 2025, the broader market has experienced a gain of just 2.88%. In this context, UBS has highlighted high-quality stocks that are less likely to reduce their current dividend payouts compared to peers. The firm predicts a 22.9% overall likelihood of dividend cuts across regions and sectors, with the US emerging as the most secure market, showing only a 6.2% chance of reductions. In addition, most sectors in the US demonstrate relative stability. Japan, however, stands out as the most promising region for dividend growth, with an expected growth rate of 9.9%.
Companies that prioritize increasing their dividends tend to have characteristics that position them for strong future performance. Over time, firms that regularly raise or initiate dividends have outperformed other market sectors, delivering higher annual returns with less volatility.
Our Methodology
For this article, we first used a stock screener to identify stocks that have reported positive returns in 2024 so far. From this selection, we chose dividend stocks with 12-month gains of at least 30%, as of the close of January 27. The stocks were then arranged in ascending order of their 12-month gain. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A group of business people discussing plans around a boardroom table adorned with a financial services company logo.
JPMorgan Chase & Co. (NYSE:JPM)
12-Month Return as of January 27: 53.2%
JPMorgan Chase & Co. (NYSE:JPM) is an American investment bank and financial services company that offers commercial banking, financial transaction processing, and asset management. The company delivered a strong performance in 2024, achieving its highest-ever annual profit of $58.5 billion, an 18% increase from the previous year. This growth was largely driven by the bank’s dealmakers and traders capitalizing on a market rebound in the fourth quarter. However, its net interest income (NII) declined by 3% year-over-year to $23.5 billion in Q4 2024, marking the first drop since 2021.
JPMorgan Chase & Co. (NYSE:JPM)’s strategic focus on investment banking and wealth management has played a key role in its success. Investment banking fees surged by 49% year-over-year in Q4 2024, reflecting strong client engagement. Meanwhile, the Asset & Wealth Management division reported a 25% rise in net income, reaching $1.5 billion, fueled by record client inflows that boosted assets under management. In the past 12 months, the stock has surged by over 53%, which makes it one of the best unstoppable dividend stocks on our list.
JPMorgan Chase & Co. (NYSE:JPM) stands out as one of the top dividend stocks, having consistently paid dividends to its shareholders since 1972. Demonstrating its commitment to shareholder returns, the company distributed $3.5 billion in dividends during the most recent quarter. The company currently offers a quarterly dividend of $1.25 per share and has a dividend yield of 1.88%, as of January 27.
JPMorgan Chase & Co. (NYSE:JPM) was included in 105 hedge fund portfolios at the end of Q3 2024, compared with 111 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds are collectively valued at more than $8.6 billion. With over 16.7 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
Overall, JPM ranks 6th on our list of unstoppable dividend stocks to invest in. While we acknowledge the potential for JPM 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 JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.