As long as investors seek income, dividends never go out of style. And there will always be investors who want income.
The new year brings plenty of opportunities for those investors. Here are 25 top dividend stocks to buy and hold in 2025.
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Financially speaking
Financial services could be one of the top-performing sectors in 2025. Why? The incoming Trump administration will likely make deregulation one of its top priorities.
| Stock | Business Summary | Forward Dividend Yield |
|---|---|---|
| 1. Ares Capital(NASDAQ:ARCC) | One of the largest business development companies (BDCs) | 8.65% |
| 2. Bank of America(NYSE:BAC) | A large financial services company providing banking and financial products | 2.34% |
| 3. Citigroup (NYSE:C) | A large financial services holding company | 3.18% |
| 4. Prudential Financial (NYSE:PRU) | A large provider of insurance, investment management, and other financial products | 4.38% |
| 5. US Bancorp (NYSE:USB) | A large financial services company providing banking and financial products | 4.13% |
Data source: Yahoo! Finance.
Most investors are probably familiar with four of these five financial stocks. However, many might not know much about Ares Capital. The business development company provides capital to middle-market businesses with revenue between $100 million and $1 billion. The demand for the direct lending offered by Ares continues to grow. In addition to offering a juicy forward dividend yield, Ares Capital has delivered exceptional total returns over the long term.
Fossil power
President-elect Trump's pledge to increase domestic oil and gas production could provide an especially nice boost for companies that operate pipelines. That's why four of the five stocks on the list below are midstream energy leaders.
| Stock | Business Summary | Forward Dividend Yield |
|---|---|---|
| 6. Enbridge (NYSE:ENB) | An energy infrastructure company operating pipelines and natural gas utilities | 6.19% |
| 7. Energy Transfer (NYSE:ET) | A midstream energy company operating pipelines, natural gas storage facilities, and more | 6.58% |
| 8. Enterprise Products Partners (NYSE:EPD) | A midstream energy company operating pipelines, natural gas processing facilities, and more | 6.59% |
| 9. ExxonMobil (NYSE:XOM) | One of the world's largest oil and gas producers | 3.67% |
| 10. Williams Companies (NYSE:WMB) | A midstream energy company operating pipelines, natural gas storage facilities, and more | 3.36% |
Data source: Yahoo! Finance.
Enterprise Products Partners currently offers the highest forward dividend yield of the group. The limited partnership has also increased its distribution for an impressive 26 consecutive years. Investors should like the company's strong balance sheet and history of double-digit percentage returns on invested capital.
Utility players
Utility stocks typically pay attractive dividends. This is often the case because the companies aren't likely to grow significantly so they prioritize their dividend programs to attract investors. However, three of the utility stocks shown in the following table delivered respectable double-digit percentage gains last year.
| Stock | Business Summary | Forward Dividend Yield |
|---|---|---|
| 11. Brookfield Infrastructure (NYSE:BIP) (NYSE:BIPC) | An infrastructure company that operates utilities, transport, midstream, and data businesses | 5.12% |
| 12. Brookfield Renewable (NYSE:BEP) (NYSE:BEPC) | A renewable energy provider that operates hydroelectric, wind, solar, and distributed generation facilities | 6.14% |
| 13. Dominion Energy (NYSE:D) | An energy provider that serves customers in Virginia, North Carolina, and South Carolina | 4.86% |
| 14. Evergy (NASDAQ:EVRG) | An energy provider that serves customers in Kansas and Missouri. | 4.32% |
| 15. UGI (NYSE:UGI) | A natural gas and electricity provider that serves customers in Pennsylvania, Maryland, and Europe | 5.26% |
Data sources: Yahoo! Finance and company websites.
Dominion Energy was one of the 2024 winners that I think could extend its momentum in the new year. Northern Virginia is a global hotspot for data centers. Because data centers require extraordinary amounts of power, this bodes well for Dominion.
Pharmaceutical powerhouses
Big pharma stocks have also been longtime favorites for income investors. Several large drugmakers pay high dividend yields.
| Stock | Business Summary | Forward Dividend Yield |
|---|---|---|
| 16. AbbVie (NYSE:ABBV) | A large drugmaker that markets therapies targeting autoimmune diseases, cancer, migraine, and more | 3.63% |
| 17. Pfizer (NYSE:PFE) | A large drugmaker that markets therapies targeting autoimmune diseases, cardiovascular diseases, cancer, migraine, and more | 6.46% |
Data source: Yahoo! Finance.
Pfizer's yield stands near the top of the list. However, one key reason why the company's dividend yield is so high is that its share price has plunged more than 50% since late 2021 when the COVID-19 pandemic was in full swing. The good news, though, is that Pfizer has multiple new products on the market that should be key growth drivers. It also has a promising pipeline with 108 clinical programs, including 30 late-stage programs.
The REIT stuff
Real estate investment trusts (REITs) must return at least 90% of their earnings to shareholders as dividends to be exempt from federal income taxes. It's not surprising, therefore, that many REITs offer highly attractive dividend yields.
| Stock | Business Summary | Forward Dividend Yield |
|---|---|---|
| 18. National Storage Affiliates Trust (NYSE:NSA) | A REIT that owns and operates self-storage facilities across the U.S. | 6% |
| 19. Realty Income (NYSE:O) | A REIT that owns commercial properties in the U.S. and Europe | 5.96% |
Data source: Yahoo! Finance.
Realty Income is arguably one of the best REITs on the market. It's the seventh-largest REIT in the world with close to 15,500 properties in eight countries. Realty Income pays a monthly dividend -- a nice plus for income investors. The company has also increased its dividend for 30 consecutive years.
Retail royalty
Speaking of impressive dividend track records, the two retailers in the table below are both Dividend Kings. To achieve this distinction, a company must increase its dividend for at least 50 consecutive years.
| Stock | Business Summary | Forward Dividend Yield |
|---|---|---|
| 20. Lowe's Companies (NYSE:LOW) | One of the largest home improvement retailers | 1.86% |
| 21. Target (NYSE:TGT) | One of the largest discount retailers | 3.28% |
Data source: Yahoo! Finance.
Target has increased its dividend for 52 consecutive years (one more than Lowe's). Although the big retailer's share price has fallen over the last 12 months, Target's long-term prospects remain bright. The company's digital channel continues to enjoy strong growth. Its Target Circle loyalty program provides insights into customers that should help identify opportunities to boost revenue and profits. Target's investments in technology, including artificial intelligence (AI), should enable the company to increase operational efficiency.
A mixed assortment
The final four dividend stocks to buy and hold in 2025 are a mixed assortment. The common denominators between these stocks include that they have solid businesses built for the long term and they all pay juicy dividends.
| Stock | Business Summary | Forward Dividend Yield |
|---|---|---|
| 22. Honda Motor (NYSE:HMC) | A large manufacturer of autos, motorcycles, power generators, and other products | 4.98% |
| 23. PepsiCo (NASDAQ:PEP) | One of the largest food and beverage makers | 3.59% |
| 24. United Parcel Service (NYSE:UPS) | One of the largest package delivery companies | 5.28% |
| 25. Verizon Communications (NYSE:VZ) | One of the largest telecommunications services providers | 6.68% |
Data source: Yahoo! Finance.
UPS could especially be poised for a strong rebound. The stock fell almost 20% in 2024. However, UPS is again growing revenue and profits. The added front-loaded costs of the company's five-year Teamsters contract are now in the past. UPS is also focusing on higher-margin businesses such as healthcare logistics and serving small-to-medium-sized businesses.
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Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Keith Speights has positions in AbbVie, Ares Capital, Brookfield Infrastructure Partners, Brookfield Renewable Partners, Dominion Energy, Enbridge, Energy Transfer, Enterprise Products Partners, Evergy, ExxonMobil, Honda Motor, Lowe's Companies, National Storage Affiliates Trust, Pfizer, Prudential Financial, Realty Income, Target, U.S. Bancorp, UGI, United Parcel Service, Verizon Communications, and Williams Companies. The Motley Fool has positions in and recommends AbbVie, Bank of America, Enbridge, Pfizer, Realty Income, Target, and U.S. Bancorp. The Motley Fool recommends Brookfield Infrastructure Partners, Brookfield Renewable, Brookfield Renewable Partners, Dominion Energy, Enterprise Products Partners, Lowe's Companies, United Parcel Service, and Verizon Communications. The Motley Fool has a disclosure policy.
