10 Best Debt Free Dividend Stocks to Buy Right Now

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3. T. Rowe Price Group, Inc. (NASDAQ:TROW)

Number of Hedge Fund Holders: 38

Dividend Yield as of November 2: 4.91%

Total Cash (mrq): $3.77 Billion

Total Debt (mrq): $841.8 Million

T. Rowe Price Group, Inc. (NASDAQ:TROW) is a global asset management company providing investment advisory services, retirement solutions and mutual funds to individual and institutional investors. The bulk of its revenue is derived from investment advisory fees, which are in turn a function of assets under management and market performance.

T. Rowe pays a $1.30 per share quarterly dividend, which works out at $5.20 per share annually. The stock’s dividend yield comes at 4.91%, as of November 2. In addition to such a solid yield, the company has a very long track record of increasing its regular dividend and has also returned capital via special dividends and share buybacks. The cash generation is clearly sufficient to support the dividend policy. For the first 9 months of 2026, operating cash flow attributable to the company was $2.75 billion, up from $2.38 billion for the same period last year. The company returned $1.14 billion to shareholders in the last 12 months via dividends, so the regular dividend is very much within the bounds of what the company can afford.

The balance sheet provides further support for the dividend policy. T. Rowe Price had $3.77 billion in cash and $841.8 million in total debt in the most recent quarter, giving it $2.93 billion in net cash. Its overall liquidity is considerably better when you include its discretionary investments. As of September 20, it had $4.93 billion in cash and discretionary investments. That gives it the flexibility to continue to pay dividends, to invest in the business, and to weather periods of market volatility. That said, investors would still want to keep an eye on AUM and client flows, as prolonged market weakness and continued outflows would be a threat to advisory fee revenue. In Q3 2026, the firm reported $28.3 billion in net client outflows, so that is a risk that the business is exposed to. Read the company’s full analysis here: T. Rowe Price Stock Has Fallen Out of Favor. Could That Create an Opportunity?

2. Gentex Corporation (NASDAQ:GNTX)

Number of Hedge Fund Holders: 39

Dividend Yield as of November 2: 2.33%

Total Cash (mrq): $145.6 Million

Total Debt (mrq): $0

Gentex Corporation (NASDAQ:GNTX) is a developer of digital vision, connected car, dimmable glass, and fire protection technologies. The majority of its products are automotive in nature, such as auto-dimming mirrors, camera-based driver assistance systems, etc.

Gentex pays a $0.12 per share quarterly dividend, which works out at $0.48 per share on an annualized basis. At the 2.33% yield as of November 2, that’s a very modest income stream. The company has kept its quarterly dividend at this level, with $0.36 per share paid out in the first 9 months of 2026. The dividend is also very manageable in terms of earnings. For the third quarter of 2026, the company reported adjusted earnings of $0.47 per share, which means the quarterly dividend is at approximately 26% of adjusted earnings. There is therefore scope to continue to pay out to shareholders whilst also funding product development and growth.

The balance sheet is another positive for the income investor. Gentex had $145.6 million in cash and no debt in the most recent quarter, which is a very solid debt-free position. It also has short- and long-term investments of approximately $242.9 million as of September 30. For the first nine months of 2026, Gentex generated $405.2 million in operating cash flow, which is a very healthy amount of internal cash to fund the business and the dividend. The company also repurchased $270.2 million of shares during that period.

The debt-free balance sheet, the investment portfolio, and the low payout ratio all provide a very good degree of flexibility to maintain the dividend without having to resort to debt. While automotive demand and production will clearly affect revenue, the company’s debt-free position and low payout ratio give it a solid platform for dividend sustainability.

Palm Valley Capital Management mentioned GNTX in its Q3 2026 investor letter. Read here.

1. Watsco, Inc. (NYSE:WSO)

Number of Hedge Fund Holders: 40

Dividend Yield as of November 2: 4.17%

Total Cash (mrq): $648.7 Million

Total Debt (mrq): $553.7 Million

Watsco, Inc. (NYSE:WSO) is the largest distributor of HVAC products in the Americas. The company supplies HVAC equipment, parts, and related products to contractors who in turn serve the residential and commercial markets.

Watsco pays a quarterly dividend of $3.30 per share, which works out to an annual dividend of $13.20 per share. As of November 2, the dividend yield is 4.17%. The company increased its annual dividend by 10% in April 2026 and has a history of paying dividends for 52 consecutive years. The dividend policy is underpinned by strong, consistent cash generation, though the latest results point to some pressure on coverage.

For the first nine months of 2026, Watsco generated $303.7 million in operating cash flow, up 79% from $169.8 million for the same period in 2025. It paid $392 million in common dividends during that period, so operating cash flow alone did not cover the distributions. That gap is due to the seasonal working capital requirements of the distribution business, with the bulk of the investment being in inventory in the run-up to the peak seasons.

Watsco reported $648.7 million in cash versus $553.7 million in total debt according to the balance sheet metrics provided, giving it around $95 million of net cash. The September 2026 balance sheet showed $498.7 million in cash and cash equivalents and an additional $150 million in short-term cash investments. The company has just entered into a new $750 million unsecured revolving credit facility, which will provide it with further liquidity and flexibility for acquisitions and to meet its seasonal working capital needs.

Watsco’s strength in its distribution network, improving operating cash flow and access to credit all underpin its ability to continue to return value to shareholders. That said, working capital needs and dividend coverage should still be watched, particularly as the company continues to grow through acquisitions and invests in inventory to support that growth. Read the full analysis here.

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