In this article, we will take a look at some of the best dividend stocks for a retirement stock portfolio.
Dividend-paying stocks are often considered a dependable option for retirement portfolios. According to Brian Bollinger, founder of Simply Safe Dividends, structuring a portfolio around these stocks can be a valuable strategy. He explained that relying on regular dividend payments, rather than depending solely on capital gains from selling stocks, can help reduce the risk of exhausting one’s savings. He also pointed out that, unlike managing rental properties, collecting dividends requires little to no effort.
Bollinger made the following comment:
“You could be setting yourself up quite nicely. Because not only do stocks pay a dividend, but they might increase the dividend, and they could benefit from price appreciation as a result of improving earnings outlook and so forth.”
However, like any investment approach, dividend investing carries its own set of risks. Stocks with higher yields are generally more vulnerable, as the companies behind them must allocate a larger share of their resources to maintain those payouts. If one of these companies decides to significantly reduce or cancel its dividend, investors could face both a drop in share value and a cut in income.
Given this, we will take a look at some of the best dividend stocks for a retirement stock portfolio.
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. National Fuel Gas Company (NYSE:NFG)
Number of Hedge Fund Holders: 35
National Fuel Gas Company (NYSE:NFG) is among the best stocks for a retirement stock portfolio. On June 12, the company declared a 3.9% hike in its quarterly dividend to $0.535 per share. Through this increase, the company stretched its dividend growth streak to 55 years.
In addition to this strong dividend growth, National Fuel Gas Company (NYSE:NFG) has also paid regular dividends to shareholders for 123 years in a row.
The company’s steady dividend growth is largely due to its solid cash reserves. In the latest quarter, it generated $473.8 million in operating cash flow, while its levered free cash flow over the past twelve months totaled $50.3 million.
National Fuel Gas Company (NYSE:NFG) offers a dividend yield of 2.54%, as of June 13, and it will trade ex-dividend on June 30.
The stock has surged by over 37% since the start of 2025.
National Fuel Gas Company (NYSE:NFG) is a diversified energy firm with a fully integrated portfolio of natural gas and oil operations. Its business is divided into four key segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility.
9. American Water Works Company, Inc. (NYSE:AWK)
Number of Hedge Fund Holders: 44
American Water Works Company, Inc. (NYSE:AWK) is one of the best stocks for a retirement stock portfolio. The stock was recently added to CNBC’s ‘All-Weather Stock List’ because of its defensive qualities. Before this, it was also featured in a list by Trivariate Research highlighting the top-performing S&P stocks during the tariff-related market correction from February 18 to April 8.
According to the firm, led by former Morgan Stanley chief strategist Adam Parker, American Water Works Company, Inc. (NYSE:AWK) gained over 10% during that period. Parker shared defensive stock ideas as a precaution, even though many of his clients expected the market to continue its upward trend.
American Water Works Company, Inc. (NYSE:AWK) likely attracted attention during the correction because its revenue is entirely domestic, making it unaffected by tariffs. In addition, its earnings are seen as stable even in a potential recession.
American Water Works Company, Inc. (NYSE:AWK) is a strong dividend stock, having raised its payouts for 17 consecutive years.
With a dividend yield of 2.34%, the water utility provides investors with steady income and a buffer against market volatility tied to trade tensions. As seen in April, traders quickly turned to this stock, and would likely do so again in similar conditions.
AWK has surged by over 14% since the start of 2025.
American Water Works Company, Inc. (NYSE:AWK) stands as the largest regulated provider of water and wastewater services in the US. Founded in 1886, the company serves over 14 million people through its regulated operations across 14 states and 18 military bases, delivering safe, clean, dependable, and affordable water and wastewater solutions.
8. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 49
Altria Group, Inc. (NYSE:MO) is among the best stocks for a retirement stock portfolio. The stock was highlighted by UBS equity strategists as one of the companies that offer “safe haven” qualities, marked by strong operational performance, low stock price volatility, and a substantial dividend.
The company offers a dividend yield close to 7% and has a beta of just 0.5, meaning its stock remains relatively stable during market turbulence while delivering a return that’s about 60% higher than the yield on a 10-year Treasury bond.
Trivariate Research also included Altria Group, Inc. (NYSE:MO) in one of its defensive stock baskets. The firm, led by Adam Parker, pointed out that Altria tends to perform well during market downturns, while also showing strong price momentum and trading at a valuation lower than its historical average.
Over the past few years, Altria Group, Inc. (NYSE:MO) stock has gained considerable ground, partly due to growing interest in the smokeless tobacco market. The company produces On! nicotine pouches, and its shares rose 30% last year and another 15% this year, through June 12 (not including dividends), reaching their highest level in six years. While that rally may raise some concerns, the nearly 7% dividend offers investors a sense of stability and income.
Altria Group, Inc. (NYSE:MO) has raised its dividends 59 times in the past 55 years, which makes it a reliable option for income investors.
Altria Group, Inc. (NYSE:MO) maintains a broad portfolio spanning both the tobacco and cannabis sectors. By leveraging its fully owned subsidiaries and strategic investments, the company aims to offer leading product options for adult consumers while also focusing on delivering strong returns to shareholders through dividend payouts and long-term growth.
7. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 62
Target Corporation (NYSE:TGT) is one of the best stocks for a retirement stock portfolio. On June 12, the company’s board of directors approved a quarterly dividend of $1.14 per share, marking a 1.8% increase from the previous dividend of $1.12 per share.
This dividend will be paid on September 1, 2025, to shareholders who are on record as of the close of business on August 13, 2025. This upcoming payment will be Target’s 232nd consecutive dividend since the company went public in October 1967.
With this latest increase, Target Corporation (NYSE:TGT) has achieved its 54th straight year of annual dividend growth in 2025.
As of June 13, TGT has a dividend yield of 4.78%.
Target Corporation (NYSE:TGT) operates close to 2,000 stores along with its online platform, Target.com, with a mission to bring everyday joy to families. Since 1946, the company has dedicated 5% of its profits to support communities, an amount that now adds up to millions of dollars each week.
6. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 65
Colgate-Palmolive Company (NYSE:CL) is among the best dividend stocks for a retirement stock portfolio. On June 12, the company announced that its Board of Directors has approved a quarterly cash dividend of $0.52 per share, which will be paid on August 15, 2025, to shareholders on record as of July 18, 2025.
Though the recent dividend was consistent with the previous dividend, Colgate-Palmolive Company (NYSE:CL) has consistently paid dividends on its common stock since 1895. In addition, the company has raised its payouts for 62 consecutive years.
Colgate-Palmolive Company (NYSE:CL) is a purpose-driven and innovative company committed to creating a healthier future for people, pets, and the planet. Its product lineup spans Oral Care, Personal Care, Home Care, and Pet Nutrition, with brands available in over 200 countries and territories around the world.
As of June 13, Colgate-Palmolive Company (NYSE:CL) has a dividend yield of 2.30%, and the stock has surged by nearly 3% in the past month.
5. PepsiCo Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 71
PepsiCo Inc. (NASDAQ:PEP) is among the best dividend stocks for a retirement stock portfolio. The stock made it to UBS’s list as a strong defensive investment. Its shares have dropped nearly 15% so far in 2025, but the stock offers a dividend yield of 4.4%.
While most analysts rate PepsiCo Inc. (NASDAQ:PEP) as a Hold, the average price targets suggest nearly 15% potential upside from its current trading level, according to LSEG data.
In May, PepsiCo Inc. (NASDAQ:PEP) increased its quarterly dividend by 5% to $1.4225 per share compared to the previous year. The company has consistently paid dividends since 1965 and celebrated its 53rd straight annual dividend increase this year.
Recently, PepsiCo Inc. (NASDAQ:PEP) has been expanding its portfolio, completing the $1.95 billion acquisition of probiotic soda brand Poppi last month, which includes $300 million in expected cash tax benefits.
PepsiCo Inc. (NASDAQ:PEP) is a leading global company in the food and beverage industry, involved in the production, marketing, and distribution of a broad variety of products. It is widely recognized for popular brands such as Pepsi, Lay’s, Doritos, Gatorade, and Quaker. The company’s operations span both the beverage and food sectors, with a presence in more than 200 countries and territories around the world.
4. The Goldman Sachs Group, Inc. (NYSE:GS)
Number of Hedge Fund Holders: 77
The Goldman Sachs Group, Inc. (NYSE:GS) is one of the best dividend stocks for a retirement stock portfolio. On June 12, Bank of America reaffirmed its Buy rating on Goldman Sachs, highlighting the firm’s ability to evolve with changing conditions, describing it as having “proven DNA to adapt to an ever-changing world.”
The bank set a price target of $700 per share, suggesting a 12% gain from June 11’s closing price of $624.17. Analyst Ebrahim Poonawala noted The Goldman Sachs Group, Inc. (NYSE:GS)’s long track record of weathering challenging periods, pointing to the Paul Volcker era at the Federal Reserve and the 2008 financial crisis as moments that showcased “a strong combination of scale and flexibility.” Poonawala made the following comment:
“A sea change in the macro backdrop (interest rates, geopolitics) vs. post-GFC [Great Financial Crisis] years combined with a strategy that is focused on deepening client relationships (via financing) has increased the resiliency of trading revenues.”
He also projected ongoing strength in The Goldman Sachs Group, Inc. (NYSE:GS)’s trading revenue, which stood out in the bank’s latest quarterly results. The analyst further stated:
“Goldman’s presence in the private credit space dating back to the mid-90s, history of strong risk management (superior client selection) should reduce the risk from any potential credit volatility in this space.”
GS has surged by nearly 7% since the start of 2025.
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 91
Johnson & Johnson (NYSE:JNJ) is added to our list of the best dividend stocks for a retirement stock portfolio. On June 12, UBS global equity strategist Andrew Garthwaite’s team pointed to Johnson & Johnson as one of the top cyclical picks, excluding financials, whose performance tends to move with the broader economy.
The stock has gained over 9% in 2025 and currently offers a dividend yield of around 3.4%. Most analysts rate it as a hold, though LSEG data suggests there’s still over 9% potential upside from current levels.
Last month, Goldman Sachs raised its price target on Johnson & Johnson (NYSE:JNJ) from $172 to $176 and added the stock to its conviction list. The firm made the following statement in its May report:
“JNJ is a stable, defensive grower with the industry’s strongest balance sheet allowing for continued high [return on invested capital] investments in the Innovative Medicines segment to augment revenue growth.”
The firm highlighted that JNJ “has a strong pipeline,” with “meaningful revenue opportunities” in treatments for conditions such as multiple myeloma, lung cancer, and other serious illnesses.
2. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 93
Costco Wholesale Corporation (NASDAQ:COST) is one of the best stocks for a retirement stock portfolio. UBS advises staying invested in Costco, noting the company’s strong performance early in the year and its potential to keep outperforming the broader market regardless of economic conditions.
Analyst Michael Lasser emphasized the importance of Costco Wholesale Corporation (NASDAQ:COST)’s dedicated membership base, which he believes will keep supporting sales growth. He also praised O’Reilly’s expansion into both urban and rural locations, pointing out that this strategy improves the company’s ability to make quick deliveries.
Lasser made the following comment:
“These retailers also should see an accelerated upswing as the backdrop improves. This is because they tend to benefit from periods of disruption and come out stronger on the other side of it. Plus, each of these retailers has unique drivers that can help them succeed in various macro backdrops, driving sustainable sales growth and market share gains.”
Costco Wholesale Corporation (NASDAQ:COST) has surged by nearly 9% since the start of 2025, outperforming the market, which has only returned nearly 2% during this period.
1. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 100
Walmart Inc. (NYSE:WMT) is among the best dividend stocks for a retirement stock portfolio. In a note shared on June 10, analyst Michael Lasser of UBS suggested that holding shares of top-tier retailers might offer some level of safety during uncertain times.
He expressed a preference for Walmart Inc. (NYSE:WMT), and his firm reportedly indicated that the stock could see significant gains if the broader economic outlook improves, offering investors both downside protection and growth potential.
Lasser was said to have highlighted Walmart Inc. (NYSE:WMT) as one of the few retailers with a clear path to upward revisions in earnings estimates under current conditions. He also commended the company’s scale, operational network, and progress in e-commerce.
Walmart Inc. (NYSE:WMT) is a solid dividend payer, with 52 consecutive years of dividend growth under its belt. The stock is up by nearly 5% in 2025 so far, outperforming the broader market.
While we acknowledge the potential of WMT 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 WMT and that has 100x upside potential, check out our report about this cheapest AI stock.
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