3 Top Dividend Stocks Yielding More Than 3% That You Shouldn’t Hesitate to Buy Right Now
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With the S&P 500 back in rally mode, the dividend yield on the broad market gauge is declining. It recently fell to about 1.2%, close to its record-low last reached a quarter century ago. It won’t be a shock to you, therefore, that the dividend yield on most stocks isn’t quite enticing these days.
But there are still some enticing choices available to yield-hungry investors. ExxonMobil (XOM -0.36%), Essex Property Trust (ESS 0.61%), and Johnson & Johnson (JNJ -0.94%) each have dividend yields above 3% right now. With sterling dividend-paid records, income investors shouldn’t wait to purchase their stocks today.
3 Top Dividend Stocks Yielding More Than 3% That You Shouldn’t Hesitate to Buy Right Now
Why Invest in Dividend Stocks in 2025?
With inflation still lingering and central banks adjusting interest rates, investors are returning to high-dividend stocks for several reasons:
- 📈 Stable returns in uncertain markets
- 💸 Passive income for retirement or reinvestment
- 🏦 Compounding power via dividend reinvestment plans (DRIPs)
- ✅ Tax benefits on long-term holdings in many jurisdictions
Now, let’s dive into the three dividend stocks that should be on your radar right now.
📊 1. PepsiCo (PEP)
Dividend Yield: ~3.1%
Sector: Consumer Staples
Payout Frequency: Quarterly
🔍 Why Buy?
PepsiCo is a global powerhouse with leading brands like Pepsi, Lay’s, Tropicana, Gatorade, and Quaker. Even in an inflationary environment, PepsiCo maintains strong pricing power and brand loyalty.
- In 2024, PepsiCo increased its dividend for the 52nd consecutive year, placing it among elite Dividend Kings.
- Its dividend payout ratio is sustainable at ~65%, backed by growing free cash flow.
- Strong global expansion, especially in snacks and beverages, ensures continued growth.
📈 Outlook
With steady earnings growth and defensive characteristics, PepsiCo is a perfect low-risk dividend play—ideal for conservative investors and retirees seeking income.
📊 2. Realty Income Corp (O)
Dividend Yield: ~5.2%
Sector: Real Estate Investment Trust (REIT)
Payout Frequency: Monthly
🔍 Why Buy?
Realty Income, known as “The Monthly Dividend Company,” owns over 13,000 commercial properties and leases them to retail giants like Walgreens, 7-Eleven, and FedEx. It has become a favorite for dividend investors thanks to:
- 121 consecutive dividend increases
- Monthly income—a rarity in the stock market
- A diversified tenant base with high occupancy (~98%)
🏡 Inflation Hedge
REITs like Realty Income are natural hedges against inflation, as property values and rents often rise with CPI. In a climate where yield + stability = gold, Realty Income offers both.
📊 3. Verizon Communications (VZ)
Dividend Yield: ~6.6%
Sector: Telecommunications
Payout Frequency: Quarterly
🔍 Why Buy?
Verizon is a telecom titan in the U.S., offering stable, recurring cash flows from its wireless, broadband, and 5G services. It’s especially attractive in 2025 for these reasons:
- High, reliable dividend above 6%
- Consistent cash flow generation from 120M+ wireless subscribers
- Strategic 5G rollout with cost-optimization plans
Despite some sluggish stock performance, Verizon’s dividend remains well-covered, and the company has shown discipline in capex and debt reduction.
3 Top Dividend Stocks Yielding More Than 3% That You Shouldn’t Hesitate to Buy Right Now
📌 How to Pick Good Dividend Stocks in 2025
Here are a few quick filters you can use:
| Criteria | Ideal Target |
|---|---|
| Dividend Yield | 3% or higher |
| Payout Ratio | Below 70% (sustainable) |
| Dividend Growth | 5+ years of consistent hikes |
| Sector | Defensive (REITs, utilities, telecoms, staples) |
| Cash Flow | Strong and consistent free cash flow |
💡 Bonus Tip: Use DRIPs to Maximize Returns
Most brokerages now offer Dividend Reinvestment Plans (DRIPs) that automatically reinvest your dividend payouts into more shares—helping you compound wealth over time without lifting a finger.
If you’re investing ₹50,000 or $1,000 every few months, and reinvest consistently, you could be looking at 8–12% CAGR with dividend + appreciation.
⚠️ Risks to Keep in Mind
- Dividend cuts: Always monitor payout ratios and earnings
- Interest rate changes: REITs and telecoms can be rate-sensitive
- Regulatory shifts: Especially in telecoms and international stocks
Diversifying across 4–6 dividend stocks can reduce risk.
🛒 Where to Buy These Stocks?
You can buy these stocks using:
- 🇺🇸 U.S. investors: Fidelity, Charles Schwab, Robinhood, E*TRADE
- 🇮🇳 Indian investors: Groww, INDmoney, Vested, HDFC Global Investing
Make sure your platform supports U.S. stocks, and check the TCS (Tax Collected at Source) applicable for Indian investors.
3 Top Dividend Stocks Yielding More Than 3% That You Shouldn’t Hesitate to Buy Right Now
🏁 Final Thoughts: Build Long-Term Income Now
While AI stocks and crypto dominate headlines, dividend stocks quietly build wealth year after year. The three we covered—PepsiCo, Realty Income, and Verizon—offer:
- Stability
- Strong dividend history
- Yields above 3%
Whether you’re a retiree, side hustler, or beginner investor, these dividend gems offer the consistency and passive income many seek in uncertain economic times.
