The 2025 US stock dividend opportunity is here! How to choose 5 high-dividend stocks?

If you profited from the rise of the US stock market in 2024 but are becoming cautious due to the uncertainties in the macroeconomy in 2025, now is a good time to consider shifting towards High Dividend Stock Recommendations. Especially when the S&P 500’s overall dividend yield is only 1.2%, there are still some undervalued high-yield opportunities waiting to be uncovered.

According to the latest data, Wall Street is optimistic about dividend growth in 2025—Goldman Sachs expects the earnings per share of S&P 500 constituents to grow by 11%, driving a 7% increase in dividends; Bank of America Securities even forecasts a 12% dividend increase; S&P Dow Jones Indices analysts predict total dividend payouts will hit a new high of $685 billion. This suggests that 2025 could be a golden window for investing in high dividend stock recommendations.

Why Focus on High Dividend Stocks in 2025?

Attractive Stable Cash Flows

In an environment of economic cycle fluctuations, the main reason high dividend stock recommendations are popular is that they can provide stable cash returns. These companies typically have steady profitability, ample cash flow, and resilient business models.

Historical data shows that the primary driver of dividends is earnings growth. Starting in 2024, the EPS of S&P 500 components began to rebound more rapidly. Market data indicates that there is usually about a three-quarter lag between earnings growth and dividend increases, meaning that dividend growth in 2025 is essentially a certainty.

Essential for Diversified Portfolios

In recent years, dominated by tech and growth stocks, high dividend stocks can help investors achieve portfolio balance. By selecting stable dividend payers from traditional industries, investors can effectively reduce overall investment risk and provide a buffer during market volatility.

Top 5 High Dividend Stocks to Watch Now

Based on the latest 2025 data screening, these stocks not only have dividend yields above 5% but also possess solid operational fundamentals.

1. Enbridge

Enbridge is a giant in energy infrastructure, covering liquid pipelines, natural gas transportation, renewable energy generation, and more. Notably, the company has maintained a dividend growth record for 22 consecutive years, with a current yield of 6.03%.

Recently, Royal Bank of Canada raised its target price from $59.00 to $63.00 and maintained an “Outperform” rating. With a market cap of $97.529 billion, it ensures industry stability.

2. Verizon

As one of the 30 components of the Dow Jones Industrial Average, Verizon is a leading US telecom provider. Its latest financial report shows Q4 2024 revenue of $35.7 billion, up 1.7% year-over-year, exceeding market expectations.

Its dividend yield is 6.99%, with a market cap of $166.969 billion and a P/E ratio of 17.17. While BofA Securities currently maintains a hold rating, its stable core business and global leadership provide lasting cash flow security for investors.

3. Realty Income

This REIT specializes in single-tenant commercial real estate, owning over 12,237 properties with a leasable area of 236.8 million square feet. Its business model ensures stable rental income through long-term net leases.

Q3 2024 results show operating income of $3.931 billion (up 30.91% YoY), net profit of $666 million. Dividend yield is 5.80%, P/E ratio 51.45. Stifel analysts maintain a buy rating with a target price of $66.50.

4. Brookfield Renewable

This company owns one of the world’s largest pure renewable energy portfolios, with an installed capacity of approximately 6,707 MW. Its assets include 204 hydroelectric facilities, 28 wind farms, and more, across 13 power markets in Canada, the US, and Brazil.

Q3 2024 revenue was $4.444 billion (up 19.62% YoY), with JP Morgan maintaining an overweight rating and a target price of $28.00. Dividend yield is 5.60%, market cap $4.581 billion.

5. Vici Properties

Focused on owning and operating casino, hotel, and experiential assets, Vici’s properties include Caesars Palace, MGM Grand, and The Venetian in Las Vegas. Its 93 geographically diverse assets are secured through triple-net leases, ensuring stable income.

Q3 2024 revenue was $2.873 billion (up 7.2% YoY), net profit of $2.097 billion. Dividend yield is 5.89%, market cap $30.877 billion, P/E ratio 10.86. Barclays has a buy rating with a target price of $36.

Core Stock Selection Strategies for High Dividend Stocks

Step 1: Select Industry Leaders

Within one or two industries of interest, pick 1-3 companies, and thoroughly research their financial health, profitability, and growth prospects. The key criteria are stable revenue, ample cash flow, and sustainable development.

Step 2: Assess Earnings Stability

Examine the company’s earnings performance over 5 to 10 economic cycles. Only companies that can maintain relatively stable earnings amid fluctuations should be considered reliable for dividend payments.

Step 3: Review Dividend History

Check the company’s dividend payment records over recent years. Prioritize companies with stable or increasing dividends annually. Also, understand their dividend policy to ensure it is reasonable and sustainable.

Step 4: Evaluate Dividend Yield Rationality

When calculating dividend yield, if encountering abnormally high or low figures, analyze the underlying reasons. Is the company facing difficulties, or are there strategic arrangements? These details impact long-term returns.

Step 5: Consider Analyst Ratings

Before making final decisions, review the latest analyst and investment bank opinions to avoid mistiming purchases and incurring higher capital costs.

Opportunities and Risks of Investing in High Dividend Stocks

Main Advantages

• Generous Cash Returns: Continuous dividends provide stable cash flow income.
• Strong Risk Resistance: Mature, stable companies are better equipped to handle market fluctuations.
• Capital Appreciation Potential: While paying dividends, stock prices may also appreciate.
• Portfolio Balance: High dividend stocks can offset aggressive growth stock investments.

Risks to Watch Out For

Companies with high debt levels, unstable earnings, or questionable business models may face dividend cuts or suspensions. Thorough financial research and risk assessment are essential before investing, to balance returns and risks effectively.

Conclusion

The dividend growth outlook for 2025 offers new opportunities for investors. However, selecting suitable high dividend stocks is not just about looking at numbers; it requires a deep understanding of the company’s fundamentals, cash flow stability, and long-term growth potential. By applying the systematic screening strategies outlined above and considering expert opinions, investors can aim for stable cash flows while achieving steady asset appreciation.