Dividend stocks are struggling this year, but savvy income-minded investors can still find some good deals.
According to the S&P Dow Jones Indices, U.S. common dividend increases were $9.8 billion in the second quarter of 2025, down 49.8% from $19.5 billion in Q1 2025 and down 52.1% from $20.4 billion in Q2 2024.
“Dividend growth declined in Q2 2025, as concern over forward cash commitment was inhibited by the uncertainty over tariffs and their impact on sales, costs, and the general economy,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
Overall, companies continued to increase their dividends, albeit with more minor annual boosts for firms. “On the other hand, for the companies not on a perceived schedule, many appeared to put off their actions for now,” Silverblatt said.
Having said that, prospects for dividend growth look brighter for the rest of 2025, according to S&P, and that’s good news for sector investors who count on stable dividend payouts to fortify their portfolios.
“The payment of a dividend plays a meaningful role in portfolio strategy,” said Tim Thomas, chief investment officer at Badgley Phelps Wealth Managers in Seattle, Washington. “Dividends provide investors with income, allowing them to access cash without needing to sell their shares at potentially inopportune times. Dividends also provide a consistent source of cash, even during periods of volatility, allowing investors to reinvest at more attractive valuations.”
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Three Solid Dividend Stocks Right Now
Investors seeking stellar dividend deals can take a cue from wealth managers, who point to several bargains for income-minded investors, with these three names at the top of the list.
Walmart
Dividend Yield: 0.99%
Currently, there are interesting opportunities in dividend-paying companies that are quietly integrating AI into their operations. “While the market chases high-multiple, pure-play AI names, many established businesses with strong fundamentals are being overlooked,” said Joseph Zappia, co-chief investment officer at LVW Advisors in Pittsford, New York.
Zappia points to Walmart (NYSE:WMT), which is leveraging AI for inventory management, supply chain efficiency, and customer service. “Despite being a ‘Dividend King’ with over five decades of increases, it’s undervalued because it’s still seen as a traditional retailer,” he noted.
Verizon
Dividend Yield: 6.62%
Market experts also note that while the dividend yield itself is a significant feature, the ability to sustain and grow that dividend in the future is equally crucial.
“If a company’s revenues are shrinking, highly cyclical, or the dividend itself is a major portion of the overall profits, the dividend could likely be cut or suspended at some point in a capital restructuring,” said Karl Farmer, vice president and portfolio manager at Massachusetts-based Rockland Trust. “We look for companies that have raised dividends consistently every year without cuts. This, accompanied by the ability to keep paying, are typically a good indicator of stability.”
One of Farmer’s favorites is Verizon (NYSE:VZ), which boasts a sturdy 6.60% dividend yield, and “steady cash flows from sticky customer base, low-growth, but high-consistency and dividend stability,” he noted.
VZ also fits the template of a good dividend stock, featuring an attractive yield and trading at reasonable valuations, as the spotlight remains on newer AI entrants. “Verizon benefits from edge computing tied to AI demand,” Zappia said.
UnitedHealth Group
Dividend Yield: 3.07%
UnitedHealth (NYSE:UNH) has increased its dividend rate for 16 consecutive years, with an annual rate of 3.07%, paying $8.84 per share.
“A 50% stock hit has presented a 3% yield for United Health shareholders,” Farmer said. “Utilization and pricing will be addressed next year, and the dividend is a small part of the overall profits. Right now, UNH offers a great opportunity to collect income and a stock rebound could reward shareholders.”
Sector Outlook For The Rest Of 2025
Dividend growth should grow slowly but finish strong for the second half of the year.
“Given the speed and expected implementation of the current legislative changes from Washington, as well as an expected resolution to the tariff situation later this year (first through temporary extensions of the July 9 deadlines), companies may continue their uncertainty over economics,” Silverblatt noted.
Once policies become clear, companies “will be in a better position” to adjust their business plans and commit to dividends, he noted.
“Working with a base case for a higher-level resolution, the second half of 2025 could be stronger than historical averages for dividends,” Silverblatt added. “Q3 is expected to start out with an improvement from big banks as they continue to increase their dividends, helped by the Fed’s recent positive stress test results; the third quarter has the potential to set a new quarterly dividend payment record.”
Over the year, the S&P 500 is expected to post a record dividend payment, with a 6% increase in dividend payments. “That’s down from the pre-2025 8% expectation; for 2024 dividend payments increased 6.4% and in 2023 5.1%,” Silverblatt said.
Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.
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