The Kiplinger Dividend 15: Our Favorite Dividend-Paying Stocks
Rising interest rates create a risk for The Kiplinger Dividend 15, but our favorite dividend-paying stocks remain a worthy consideration for most portfolios.
Please, spare a few thoughts for pitiable dividend-paying companies and the souls who invest in them. Interest rates are rising, rather than falling, leaving most dividend payouts struggling to compete with the robust yields of bonds. Even Treasuries look good. And the stock market? The belles of the ball once again are hot, growthy tech firms. Stodgy dividend payers are the wallflowers.
Or, just maybe, the picture is a bit more complex. No matter how juicy the yield, bonds have duration risk — the risk that prices will fall as rates rise. Dividend-paying stocks can be a port in the storm if market sentiment becomes more bearish.
For now, though, the Kiplinger Dividend 15, the list of our favorite dividend-paying stocks, has underwhelmed. Over the past 12 months, the Dividend 15 (now in its 10th year) gained 4.5%, on average, badly trailing the 15.7% total return in the S&P 500 index. There were winners, to be sure, led by Johnson & Johnson's (JNJ) 45.6% return. Three others — U.S. Bancorp (USB), Enterprise Products Partners (EPD) and Emerson Electric (EMR) — outperformed. But two legends of consumer spending, McDonald's (MCD) and Home Depot (HD), dragged down the bunch with losses of 21.6% and 27.5%, respectively.
Our methodology for finding the best dividend-paying stocks
We divide our favorites into three categories. The stalwarts are steady payers that have racked up decades of consistent dividend hikes. The dividend growers boast sizable payout hikes every year and are typically increasing their rate of dividend growth. Members of the high-yielders are high-quality stocks that offer big dividends. The average yield for the Dividend 15 as a whole is 2.5%, nearly two and a half times the 1.1% yield of the S&P 500.
Five stocks on the list — McKesson (MCK), Mastercard (MA), Broadcom (AVGO), Walmart (WMT) and our brand-new member, Amphenol (APH) — have yields below the S&P 500 average, with four on the list for their dividend growth. The 15 members increased their dividend by an average of 8.2% over the past 12 months compared with the previous year.
This year, we're removing Home Depot from the list, replacing it with electrical- and electronic-component manufacturer Amphenol. Home Depot's sales and profits have stalled along with the U.S. housing market. That has led the board to rein in dividend boosts: The payout increased only 1.5% in the past year, woefully short of the consistent double-digit growth we look for.
It's a high-quality company with solid cash flow, so we don't recommend selling if you own it, and columnist James Glassman says it might be a buy. But we just don't see a return to meaty dividend increases anytime soon, so it doesn't belong on the list of growers.
Read on for the latest on our 14 remaining members, as well as the scoop on Amphenol. (Prices, yields and other data are as of September 30, unless otherwise stated.)
Dividend stalwart: Air Products & Chemicals
- Yield: 2.6%
- Annual dividend: $7.24
- Consecutive years of increases: 44
- Five-year dividend growth rate: 4.9%
- One-year total return: 4.7%
We've been holding the ax over the head of Air Products & Chemicals (APD) for the past year, but we're now comfortable that the company is on the right track.
The seller of oxygen, nitrogen and argon to industrial customers was stumbling through a multibillion-dollar clean-hydrogen plan when it sacked its CEO in early 2025 and hired as his replacement a former executive of its well-regarded rival Linde (LIN).
The turnaround plan is taking root, if not yet bearing fruit. Though not abandoning renewables, Air Products announced in June it will cancel its expensive Louisiana Clean Energy Complex project and close several other clean-energy projects, including a zero-carbon liquid hydrogen facility in Arizona.
Air Products will record up to $2.9 billion in costs, before taxes, for its clean-energy cleanup, but investors cheered: The share price rose 15.8% in the three days following the announcement. A month later, the company beat analyst expectations for earnings, and management raised its forecast for the fiscal year that ended September 30. The materials stock has pulled back after the good news, so it's up only 4.7% over the past 12 months.
Monem Salam, a portfolio manager at investment firm Saturna Capital, who holds Air Products in the Amana Income Fund, says that investors who collected the dividend when the company wasn't doing so well are now positioned to benefit from share appreciation, too.
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Dividend stalwart: Emerson Electric
- Yield: 1.4%
- Annual dividend: $2.22
- Consecutive years of increases: 69
- Five-year dividend growth rate: 1.7%
- One-year total return: 19.9%
Emerson Electric (EMR) is one of our winners, up 19.9% over the past 12 months. The company is another turnaround story, albeit further along than Air Products. Emerson spent four years, from 2021 to 2024, selling off businesses and acquiring companies that would help it focus on automation, such as control systems and software that adjust the performance of valves and pipes in manufacturing plants.
The new focus is paying off: The company's performance in the quarter that ended June 30 topped analyst expectations, and management raised its 2026 forecast for sales, profits and free cash flow (money left over after operating expenses and spending to maintain or upgrade property and equipment).
Sri Iyer, a managing director at Toronto-based investment firm Guardian Capital who helps manage his firm's exchange-traded fund of U.S. dividend stocks, says Emerson is a beneficiary of the artificial-intelligence buildout through factory-automation and digital-transformation trends. He calls it the industrial-sector dividend "king of kings, like an emperor," with 69 consecutive years of dividend increases.
With the dividend consuming only about one-third of Emerson's free cash flow, Iyer believes Emerson has plenty of capacity to keep increasing its annual payouts by 3% to 4%. "Nothing fancy, nothing large, but it's a steady Eddie," he says.
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Dividend stalwart: Johnson & Johnson
- Yield: 2.0%
- Annual dividend: $5.36
- Consecutive years of increases: 64
- Five-year dividend growth rate: 5.1%
- One-year total return: 45.6%
Johnson & Johnson (JNJ) shares defied expectations over the past 12 months, jumping 45.6% after most analysts said the stock was fully valued. That gain is validation for the company's spin-off of its consumer businesses (such as Tylenol) to focus on prescription drugs and medical devices.
J&J received approval from the Food and Drug Administration in July for Ottava, a surgical robotic-arm system. The sales pitch is that Ottava is small enough to be stored under an operating-room table when not in use. J&J management said that five of six sites in Ottava's clinical trials previously could not fit a robot in their operating rooms. Challenging industry leader Intuitive Surgical (ISRG) "is no small feat," says Citigroup analyst Joanne Wuensch. But she says Ottava's features, combined with J&J's presence in "every operating room in the world," may allow the new device to "notably expand robotic use."
The company has a strong drug pipeline, and it exceeded analysts' earnings expectations three times in the past year. Everyone loves a winner: Now, 16 of 23 analysts covering J&J give it a Buy rating. Be mindful, however, that the analyst consensus for J&J's share price in 12 months is $279, only 5% above its September 30 price. At the risk of being too cautious again, we say wait for a dip before adding to your position.
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Dividend stalwart: McDonald's
- Yield: 3.3%
- Annual dividend: $7.72
- Consecutive years of increases: 50
- Five-year dividend growth rate: 7.5%
- One-year total return: -21.6%
We have some beef with McDonald's (MCD). We've been thinking its sales struggles were temporary as the chain finds the right balance between profitability and pricing for its value-oriented customers. McDonald's hasn't found it yet. In the quarter that ended June 30, sales at restaurants open at least one year rose only 0.8%, as price increases offset a drop in customers. The same day McDonald's revealed the numbers, management said the president of the company's U.S. business was leaving the job.
Shares are down 21.6% over the past 12 months and hit a two-year low in mid-September.
McDonald's bulls note that the company's domestic operations are only part of the picture. There are 45,000 sets of golden arches in more than 100 countries, with two-thirds outside the U.S. "McDonald's broad international footprint illustrates that the strength of its brand transcends borders," says analyst Ari Felhandler of investment research firm Morningstar, who estimates the fair value of the shares at about 17% above the September 30 closing price.
As McDonald's continues to tweak its value menu, the consumer discretionary stock, trading at 18 times estimated earnings for the next 12 months, is discounted more than at any time since the pandemic. For now, we'll keep McDonald's on our dividend menu, but more missteps will make it an unhappy meal.
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Dividend stalwart: Procter & Gamble
- Yield: 3.0%
- Annual dividend: $4.35
- Consecutive years of increases: 70
- Five-year dividend growth rate: 5.6%
- One-year total return: -2.7%
Procter & Gamble (PG) is another stalwart hurt by a discouraged U.S. consumer, with the shares falling 2.7% over the past 12 months.
The consumer-products giant — seller of Tide, Pampers, Bounty and Charmin, among nearly two dozen billion-dollar brands — has had a rough couple of years, reporting declining market share and flat sales. The fiscal year that ended June 30 showed a slight uptick in revenue, but the company's forecasts for the next 12 months were more conservative than those of other consumer-products companies, notes analyst Olivia Tong of investment firm Raymond James.
Bulls think the company is stabilizing sales, and the next step is growth. With shares trading around 21 times estimated earnings, they're at the lowest levels since 2018. Tong likes the stock, seeing a 15% gain over the next 12 months, with PG commanding a price-to-earnings (P/E) multiple of 23 — less than P&G's average P/E over the past five years. She says that outlook balances P&G's long-term earnings power and leading market shares in several consumer-products categories with cost inflation and near-term pressures from slower growth in those categories.
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Dividend stalwart: Walmart
- Yield: 1.0%
- Annual dividend: $0.99
- Consecutive years of increases: 53
- Five-year dividend growth rate: 5.8%
- One-year total return: 1.8%
Walmart (WMT) has hit a wall. A year ago, the retailer seemed to be firing on all cylinders, and the consumer staples stock was trading at a far-from-bargain P/E of 37. Even then, the shares advanced more than 30% through spring. The stock gave it all back, though. Management issued a soft annual profit forecast in May, and results for the quarter that ended July 31 showed slowing sales growth and profits, but also a huge tariff rebate. The total return over the past 12 months: 1.8%.
Now what? Despite the tumble, the shares didn't get cheap, as they trade at 35 times estimated earnings. But there are still plenty of bulls, with the analyst consensus for the stock price 12 months from now at $127, an implied gain of more than 20%
Analyst Christopher Horvers of investment firm J.P. Morgan, a bull, says the bear case is largely based on Walmart shares being pricier than the stocks of dollar stores and conventional supermarkets. He sees Walmart continuing to gain share in groceries and boosting its profit margins with the use of AI to cut costs and expand automation.
The gain in Walmart shares has left the company's yield a little sickly, at about 1%. But there is little doubt that the blue chip stock has the capacity to remain a stalwart for years to come.
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Dividend grower: Amphenol
- Yield: 0.6%
- Annual dividend: $0.50
- Consecutive years of increases: 1
- Five-year dividend growth rate: 26.7%
- One-year total return: 37.1%
We recommended Amphenol (APH) earlier this year as a tech stock worth considering because it allows investors to bet on AI without picking a winner, since the company sells to all the big players.
APH makes electronic and fiber-optic connectors used in the massive data centers that power AI. The 100-year-old company is diversified, though, with customers in the defense, automotive and telecommunications industries.
We're adding it to the list of dividend growers now because Amphenol's robust profit gains are translating into big increases in the dividend. The company's annual payout over the past year of 50 cents per share (adjusted for a two-for-one stock split in September) is more than 50% higher than the year before, giving the stock a 0.6% yield.
The company's annual dividend-growth rate tops 10% for the past two-, three-, five-, seven- and 10-year periods, according to S&P Global Market Intelligence. (Note: Amphenol's dividend growth is persistent but mildly irregular; sometimes it goes four quarters without raising, then it increases the payout in the fifth.)
Thomas Huber, manager of T. Rowe Price Dividend Growth Fund, says Amphenol has a "seasoned management team" with a long history of delivering shareholder returns through above-average growth, smart acquisitions, cost discipline, profit-margin improvement and cash generation.
The stock isn't cheap, at 29 times estimated earnings, but Huber says "management has a history of outperforming expectations." Amphenol is up 37.1% over the past year.
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Dividend grower: Broadcom
- Yield: 0.7%
- Annual dividend: $2.60
- Consecutive years of increases: 15
- Five-year dividend growth rate: 12.5%
- One-year total return: 7.2%
After two consecutive years of roughly doubling in value, Broadcom (AVGO) was due for a breather. Over the past 12 months, the stock is up a more pedestrian 7.2%.
We still like it as a dividend grower, though, because Broadcom is a profit grower. The average analyst forecast for earnings per share of $19.22 in the company's 2027 fiscal year, ending in November, would be an increase of 64% over forecasts for fiscal 2026.
The company is a collection of tech perfectly suited for the current age: semiconductor chips, high-tech components for iPhones and cloud software under its VMware brand. The last one didn't help this year as investors got spooked by the prospects for software in an AI world.
The company's forecast for the quarter that ended May 3 was conservative about AI revenue, which also hurt the shares. Now, they're trading at 20 times estimated earnings, the cheapest since 2023.
Jake MacFarlane of Florida-based money manager FourThought Private Wealth says he likes Broadcom because it has the kind of repeatable sales his firm looks for when evaluating dividend payers. Broadcom also has tens of billions of dollars of backlogged orders for chips. "There's still enormous growth for Broadcom," he says.
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Dividend grower: Cigna Group
- Yield: 2.3%
- Annual dividend: $6.24
- Consecutive years of increases: 6
- Five-year dividend growth rate: 25.1%
- One-year total return: -3.5%
Cigna Group (CI) combines a traditional health insurance company with what's called a pharmacy benefit manager (PBM), an administrator of prescription-drug programs for customers such as health insurance plans and large employers. The PBM business is where Cigna stumbled in the past year, with earnings in the quarter that ended June 30 dropping 27% from the previous year.
That overshadowed plenty of good news. Cigna exceeded analysts' expectations for quarterly profits and raised its forecasts several times in the past 12 months. Its Specialty and Care Services business, which manages care for patients with chronic conditions, increased profits by 22% in the most recent quarter.
Trading at roughly nine times estimated earnings, Cigna is "an underappreciated managed-care story" with a depressed multiple, says analyst Michael Ha of investment firm Baird. Ha sees a gain of roughly 33% over the next 12 months as investors warm up and the P/E ticks up to the low double digits.
The company boosted its dividend 3.3% in February — not the kind of increase we're looking for, but understandable given investor sentiment. The dividend represents only about 25% of profits, according to S&P, so there's room for Cigna to return to handsome dividend increases.
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Dividend grower: Mastercard
- Yield: 0.6%
- Annual dividend: $3.48
- Consecutive years of increases: 15
- Five-year dividend growth rate: 14.4%
- One-year total return: -2.5%
Over the past 12 months, sales were up more than 15% for Mastercard (MA), and profits were up more than 20%. Ho-hum, just another year for one half of the dynamic duo of credit card processors. (Visa is the other, as you may have guessed.)
Although sales and profits seem to be on a perpetual upward trend, the financial stock doesn't necessarily follow; the shares were down 2.5% over the past 12 months. Consumer spending drives Mastercard's profits, so when investors worry about their wallets, Mastercard tends to struggle. The past year included several other negative headlines, such as fears of regulatory risk from a proposed credit card competition law and the news that Berkshire Hathaway had dumped all of its Mastercard and Visa holdings.
The headlines are distractions from the 14% dividend hike announced in December 2025. Analyst Rayna Kumar of investment firm Oppenheimer & Co. says Mastercard is her top pick in the financial technology sector. The stock is trading at 26 times estimated earnings, a level not seen since 2023; Kumar says a return to 30 times earnings, coupled with her estimates for 2027 profits, leads her to see a gain of more than 25% over the next 12 to 18 months.
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Dividend grower: McKesson
- Yield: 0.4%
- Annual dividend: $3.76
- Consecutive years of increases: 10
- Five-year dividend growth rate: 14.3%
- One-year total return: 11.0%
McKesson's (MCK) free cash flow is up roughly 25% over the past year, according to S&P. That made it easy for the company to hike its dividend 15% in time for the October 1 payment. That's par for the course for McKesson, which has a five-year dividend growth rate of just over 14%. McKesson was also one of the better performers in the Dividend 15, up 11.0% over the past 12 months.
The company is one of the U.S.'s three largest drug wholesalers, along with Cardinal Health (CAH) and Cencora (COR). That's big business: McKesson crossed the $400 billion mark in revenue earlier this year.
McKesson isn't relying on its oligopoly for the future, though. The company is making acquisitions in high-growth areas such as cancer treatments, eye care and specialty medicines. In August, McKesson announced it will buy Precision Medicine Group, a contract research organization that manages clinical trials and research for cancer drugs, for $2.25 billion.
The Precision buy is a small deal compared with McKesson's heft, but analyst Charles Rhyee of investment firm TD Cowen says it's a meaningful addition to McKesson's existing cancer-services network. McKesson is one of Rhyee's top healthcare picks, as he sees sustainable revenue growth and profit-margin expansion.
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High yielder: Duke Energy
- Yield: 3.8%
- Annual dividend: $4.34
- Consecutive years of increases: 22
- Five-year dividend growth rate: 2.0%
- One-year total return: -4.4%
The bar for being a high-yielding stock has never been lower. Thanks to the continuing outperformance by growth stocks that pay little to no dividend, the S&P 500 dividend yield is falling toward 1%, an all-time low. Although we used to look for stocks that consistently pay a 4% yield, the list now retains companies that pay 3% or more — triple the S&P 500 yield.
Duke Energy (DUK) looks like a sleepy utility, but it's poised to position itself in the eyes of investors as a growth utility — and reap the increase in stock price that comes with it. The Charlotte-based seller of electricity and gas is crafting one of the industry's most ambitious plans to serve an expected wave of data centers and other tech infrastructure. The utility's capital budget for the next five years is roughly $100 billion.
The combination of serving growing populations and massive industrial customers makes several analysts who cover the utility stock think Duke will approach — or exceed — the top end of its forecast of 5% to 7% annual growth in earnings per share in a couple of years' time. Analyst Richard Sunderland of investment firm Truist says Duke's drivers of growth are "beginning to come together."
Duke stock yields 3.8%, and its track record suggests the company will return some of those increased profits: 2026 marks the 22nd year Duke has increased its dividend. We'll be keeping an eye on Duke's big plans, however. In September, North Carolina regulators rejected a Duke plant expansion, expressing worries that residential customers might subsidize the data centers.
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High yielder: Enterprise Products Partners
- Yield: 6.3%
- Annual distribution: $2.24*
- Consecutive years of increases: 28
- Five-year dividend growth rate: 4.2%
- One-year total return: 20.9%
Enterprise Products Partners' (EPD) units shot higher than a gushing oil well over the past year, returning 20.9%, most of which was price appreciation. The payouts represented a 7.0% yield a year ago, but they're "only" 6.3% now — reflecting the math when a dividend payer sees its shares skyrocket. (That's still the highest yield of the Dividend 15 even though the margin has shrunk.)
The company's "products" are pipelines, with the equivalent of 14.7 million barrels of oil flowing through each day. Bill Selesky, an analyst at Argus Research, believes Enterprise can generate profits "in just about any energy market" and should be able to keep its debt levels below the industry average. He calls the distribution "safe and sustainable," noting the company has raised its payout for 28 straight years. (Enterprise is a master limited partnership, which requires special attention with regard to tax accounting, even in a retirement account.)
The analyst consensus for the share price in 12 months is just over $41, suggesting appreciation of about 15%. Given the unpredictability of today's energy markets, however, we can't rule out a bigger move.
* Distributions are similar to dividends but are treated as tax-deferred returns of capital and require different paperwork come tax time.
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High yielder: Realty Income
- Yield: 6.0%
- Annual dividend: $3.25
- Consecutive years of increases: 31
- Five-year dividend growth rate: 2.8%
- One-year total return: -4.9%
The company creeping up on Enterprise's yield? That would be Realty Income (O), the real estate investment trust (REIT) whose payouts represent a yield of 6.0%, up from 5.3% a year ago. Even better for the impatient, the checks come monthly, not quarterly. (Realty Income has trademarked the phrase "The Monthly Dividend Company.")
The REIT is one of the largest owners of what's called triple-net properties, where renters pay for most of the improvements and maintenance, keeping Realty Income's capital expenses low. Its portfolio is concentrated on recession-resistant grocers, druggists and dollar stores. But management says its new focus is "capital diversification." For example, a deal in June will see Realty Income pump $1.4 billion into a $6 billion joint venture that will own three data centers.
Is Realty Income straying from its mission? The company's leadership asks investors to trust them, saying that the stock's 5,430% cumulative total return since its 1994 NYSE listing is nearly twice the return of the S&P 500 index.
Analyst Kevin Brown of research firm Morningstar notes Realty Income is one of only two REITs to be members of the S&P High Yield Dividend Aristocrats Index (it has 31 years of dividend increases) and have a credit rating of A- or better from Standard & Poor's. Realty Income is "one of the most dependable investments for income-oriented investors," he says.
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High yielder: U.S. Bancorp
- Yield: 3.6%
- Annual dividend: $2.16
- Consecutive years of increases: 16
- Five-year dividend growth rate: 4.4%
- One-year total return: 23.9%
U.S. Bancorp (USB) had a strong first year in the Dividend 15, up 23.9%. That exceeded our expectations when we added it to the list in 2025, since we thought a 4% yield and a long track record of racking up profits made it a nice fit. The outsized return has clipped the yield to 3.6%, but investors probably don't mind.
The Minneapolis-based firm is the parent of U.S. Bank, with nearly 2,100 branches in 29 states, mostly in the Midwest and West. U.S. Bank has a large payment-processing business, as well as corporate trust, wealth management and mortgage banking divisions, to diversify profit from consumer lending. In June, U.S. Bancorp closed a deal to buy investment bank and broker BTIG.
There's good news: While the shares ripped upward, profits increased nearly as quickly, by 20%. That means the stock still trades at 11 times estimated earnings, as it did when we added it a year ago. How long will that last? Analyst Peter Winter of investment firm D.A. Davidson says U.S. Bancorp's profitability metrics are at the upper end of its peer group, and if it can sustain its strong revenue momentum, "it should regain its premium valuation."
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
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