In this article, we will take a look at some of the best overlooked stocks that pay dividends.
In recent times, dividend investing—also known as equity income—has fallen out of favor. Once a widely followed and dependable strategy, it has gradually been overshadowed. The strong capital gains delivered by growth stocks appear to have shifted investors’ attention away from the more stable and consistent returns that come with dividend-paying stocks.
However, the recent market downturn, combined with the economic impact of Trump’s trade policies, has brought renewed attention and appeal to these types of stocks. The S&P Dividend Aristocrats Index, which tracks the performance of companies with at least 25 consecutive years of dividend growth, has fallen by a little over 2% since the start of 2025, compared with a 6% fall in the broader market.
Dividend stocks have seen mixed results over different economic cycles—performing well in some downturns and falling behind in others. They generally outpaced the broader market during the recessions starting in July 1981, March 2001, and December 2007. However, their performance lagged during the shorter recessions in 1980 and 2020. This was mainly due to dividend cuts from major firms, along with limited exposure to fast-growing tech names. For context, the steepest drop in dividends came during the 2008–09 financial crisis, when S&P dividend payouts declined by 24%, though investors still received 76% of their income.
That said, while the possibility of dividend reductions is a valid concern and a potential drawback of this strategy, it shouldn’t be a reason to overlook dividend stocks altogether. When incorporated thoughtfully, they can still play a valuable role in a well-rounded investment portfolio.
M&G Investments noted that dividends serve as more than just income—they also signal a company’s financial health and management’s confidence. While short-term market returns often hinge on stock valuations, dividends play a much more substantial role in driving equity returns over longer periods, such as 10 or 20 years. The report also mentioned, citing Bloomberg’s data, that dividends play a vital role in long-term returns. Over the last 25 years, nearly half of the total gains from US stocks have come from reinvested dividends and the power of compounding. During this period, the broader market delivered an average annual return of 7.4%, with 55% attributed to rising stock prices and the remaining 45% coming from reinvested dividend income.
The fact that dividends are not guaranteed highlights a deeper financial story behind corporate decisions. Companies must carefully weigh the trade-off between returning profits to shareholders and keeping enough earnings on hand to support future expansion. Getting this balance right is a strategic task.
A particularly high dividend payout ratio—typically above 75%, though this varies by sector—can raise red flags about sustainability. When too much profit is paid out, there’s little room left to increase dividends down the line. This could eventually lead a company to scale back or even stop its dividend payments altogether, which may hold back both business growth and long-term gains in share value. Given this, we will take a look at some overlooked stocks that pay dividends.
Our Methodology
For this list, we thoroughly reviewed reputable sources such as Forbes, Morningstar, Barron’s, and Business Insider and searched for stocks that remain under the radar but have strong balance sheets and sound financials. In addition, these lesser-known dividend companies also boast dividend growth track records, which make them a reliable option for income investors. After compiling our data, we picked 10 companies with the highest number of hedge fund investors, as per Insider Monkey’s Q4 2024 database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Silgan Holdings Inc. (NYSE:SLGN)
Number of Hedge Fund Holders: 21
Silgan Holdings Inc. (NYSE:SLGN) is an American manufacturing company, headquartered in Connecticut. The company specializes in packaging for consumer goods. It has expanded over the years to become a prominent global provider of sustainable rigid packaging solutions for consumer goods, with operations spanning 107 manufacturing sites across four continents. In the past 12 months, the stock has surged by nearly 10%.
Silgan Holdings Inc. (NYSE:SLGN) reported strong earnings in the fourth quarter of 2024. The company posted revenue of $1.4 billion, which showed a 5.3% growth from the same period last year. The revenue also beat analysts’ estimates by $12.4 million. During the quarter, the company completed the acquisition of Weener Packaging. It also reported record Adjusted EBIT for its Dispensing and Specialty Closures segment and marked three straight quarters of double-digit volume growth in its dispensing product line.
Silgan Holdings Inc. (NYSE:SLGN)’s cash position also remained stable in 2024. During the year, the company generated an operating cash flow of $721.9 million, and its free cash flow came in at $391.3 million, both showing growth from $482.6 million and $356.7 million, respectively, in 2023. The company is also a solid dividend payer. In February, it declared a 5% hike in its quarterly dividend to $0.20 per share. This marked the company’s 21st consecutive year of dividend growth. With a dividend yield of 1.56%, as of April 25, SLGN is one of the best overlooked stocks.
9. Exponent, Inc. (NASDAQ:EXPO)
Number of Hedge Fund Holders: 21
Exponent, Inc. (NASDAQ:EXPO) is a California-based global engineering and technology consulting company that provides specialized knowledge across roughly 90 technical fields to clients worldwide. The company’s results came in strong in the fourth quarter of 2025. Its revenue came in at $123.7 million, which showed a 9% growth on a YoY basis and also beat analysts’ estimates by $4.17 million. The company’s net income came in at $23.6 million, up from $20.9 million in the prior-year period. EBITDA1 rose to $31.2 million, representing 25.2% of revenues before reimbursements, up from $30.5 million, or 26.8% of revenues before reimbursements, during the same period in 2023.
Exponent, Inc. (NASDAQ:EXPO) also demonstrated a strong cash position. The company ended the quarter with nearly $259 million available in cash and cash equivalents, up from $187 million in 2023. In FY24, it returned $58.3 million to shareholders through dividends. Currently, it offers a quarterly dividend of $0.30 per share, having raised it by 7.1% in February. Through this increase, the company stretched its dividend growth streak to 12 years, which makes EXPO one of the best overlooked stocks that pay dividends. As of April 25, the stock has a dividend yield of 1.52%.
At the end of Q4 2024, 21 hedge funds tracked by Insider Monkey reported having stakes in Exponent, Inc. (NASDAQ:EXPO), up from 19 in the previous quarter. The overall value of these stakes is over $174.4 million. Among these hedge funds, Fundsmith LLP was the company’s leading stakeholder in Q4.
8. WD-40 Company (NASDAQ:WDFC)
Number of Hedge Fund Holders: 26
WD-40 Company (NASDAQ:WDFC) is an American company that specializes in household and multi-use products. The company holds a diverse portfolio of recognized brands in maintenance, homecare, and cleaning products, with its offerings now sold in over 176 countries and territories around the globe.
WD-40 Company (NASDAQ:WDFC) reported mixed earnings in fiscal Q2 2025. It posted revenue of over $146 million, which grew by 5% from the same period last year. However, the revenue missed analysts’ estimates by $8.3 million. Total sales from maintenance products reached $139.3 million, reflecting a 6% increase from the same fiscal quarter a year earlier. Gross margin improved to 54.6%, up from 52.4% in the prior year period. Meanwhile, selling, general, and administrative expenses rose to $49.0 million, marking a 9% increase compared to the previous year’s fiscal quarter.
WD-40 Company (NASDAQ:WDFC) ended the quarter with $53 million available in cash and cash equivalents. Year-to-date, its operating cash flow came in at $23 million. The company currently offers a quarterly dividend of $0.94 per share and has a dividend yield of 1.68%, as of April 25. It is one of the best overlooked stocks that pay dividends, as the company has been growing its payouts for the past 17 consecutive years.
7. Graco Inc. (NYSE:GGG)
Number of Hedge Fund Holders: 26
Graco Inc. (NYSE:GGG) ranked seventh on our list of the best overlooked stocks to invest in. The company stands out as a top producer of fluid handling equipment, focusing on solutions tailored for tough materials that are thick, abrasive, or corrosive. While it operates across various cyclical industries, roughly 40% of its revenue is generated from parts and accessories, helping to maintain a steadier demand. The company’s high-end products offer solid returns for customers by cutting down on labor, material, and energy expenses, all while enhancing quality and supporting better environmental performance.
In the first quarter of 2025, Graco Inc. (NYSE:GGG) reported revenue of $528.2 million, which showed a 7.3% growth from the same period last year. The revenue also beat analysts’ estimates by $5.32 million. The company’s operating earnings and net earnings also grew by 8% and 2%, respectively, on a YoY basis. It also saw solid organic growth in both its Industrial and Expansion Markets segments, driven by improved activity in industrial and semiconductor end markets during the quarter. In the Contractor segment, Corob accounted for a 6% increase and has been performing as anticipated.
Graco Inc. (NYSE:GGG) currently offers a quarterly dividend of $0.275 per share and has a dividend yield of 1.35%, as of April 25. In 2024, the company achieved its 24th consecutive year of dividend growth.
6. Portland General Electric Company (NYSE:POR)
Number of Hedge Fund Holders: 27
Portland General Electric Company (NYSE:POR), a publicly traded utility based in Oregon, is involved in the generation, transmission, and distribution of electricity. While it may not be a prominent name in the utility space, the company holds a strategic advantage due to the presence of Transpacific communication cables within its service region. This positioning has made it an important player for the tech sector, especially as a preferred site for data center development.
In the first quarter of 2025, Portland General Electric Company (NYSE:POR) reported revenue of $928 million, which fell by 0.11% from the same period last year and also missed analysts’ estimates by $42.5 million. However, Q1 financial performance was boosted by robust energy demand from the high-tech sector and data centers, resulting in a 4.6% increase in overall load compared to the previous quarter, with industrial load rising by 16.4%.
Portland General Electric Company (NYSE:POR) has reaffirmed its full-year 2025 adjusted earnings guidance, maintaining its projection of $3.13 to $3.33 per diluted share. This outlook is based on key assumptions, including a weather-adjusted increase in energy deliveries of 2.5% to 3.5%, along with the effective implementation of power cost and financing strategies, as well as disciplined control over operating expenses.
Portland General Electric Company (NYSE:POR) ended the quarter with $11 million available in cash and cash equivalents. It generated $231 million in operating cash flow, up from $175 million in the prior-year period. On April 20, the company announced a 5% hike in its quarterly dividend to $0.525 per share. This marked the 19th consecutive year in which the company has raised its dividend, which makes it one of the best overlooked stocks that pay dividends. The stock also offers an attractive dividend yield of 5.08%, as of April 25.
5. RPM International Inc. (NYSE:RPM)
Number of Hedge Fund Holders: 30
RPM International Inc. (NYSE:RPM) is recognized for its wide range of specialty chemical products, catering to industrial, specialty, and consumer markets. The company operates through four primary segments: Construction Products Group (CPG), Performance Coatings Group (PCG), Consumer Group, and Specialty Products Group (SPG). This broad diversification helps reduce its exposure to challenges in any single market. More recently, RPM has been concentrating on boosting operational efficiency through its MAP 2025 initiative, which targets enhancements in supply chain operations and international expansion.
In fiscal Q3 2025, RPM International Inc. (NYSE:RPM) reported revenue of $1.48 billion, down 3% from the same period last year. The company pointed out that unusually cold weather in the southern US, along with wildfires in the western region, led to lower demand in areas that usually see higher levels of construction and outdoor projects during the winter. Alongside the impact of weather, the company also faced tough year-over-year comparisons, as the third quarter of last year had seen a 31% increase in adjusted EBIT.
That said, RPM International Inc. (NYSE:RPM)’s cash position remained strong. In the most recent quarter, the company reported an operating cash flow of $91.5 million, which marked the second-highest third-quarter figure in the company’s history. During the first nine months of fiscal year 2025, it returned $242.6 million to shareholders through dividends.
RPM International Inc. (NYSE:RPM), one of the best overlooked stocks, currently offers a quarterly dividend of $0.51 per share. The stock has a dividend yield of 1.95%, as of April 25. The company is a Dividend King, with 51 consecutive years of dividend growth under its belt.
4. Old Republic International Corporation (NYSE:ORI)
Number of Hedge Fund Holders: 34
Old Republic International Corporation (NYSE:ORI) is an American provider of property and title insurance, with a strong emphasis on serving businesses, government entities, and institutions. Most of its revenue is generated from insurance policies issued domestically, offering liability protection across sectors such as transportation, aviation, construction, healthcare, and energy. The company is also a major player in the title insurance space, helping to safeguard lenders and buyers in real estate transactions against potential claims or unpaid liens tied to the property. The stock has surged by over 24% in the past 12 months.
In the first quarter of 2025, Old Republic International Corporation (NYSE:ORI) reported revenue of $2.06 billion, which saw an 11.4% growth from the same period last year. The company’s net investment income of $170.7 million also showed a 4% increase on a YoY basis. Net operating income rose to $0.81 per diluted share, up 20.9% from $0.67 in the previous year. Consolidated net premiums and fees earned exceeded $1.8 billion, reflecting a 12.1% increase.
On February 28, Old Republic International Corporation (NYSE:ORI) declared a 9.4% increase in its quarterly dividend to $2.09 per share. This was the company’s 44th consecutive year of dividend growth, which makes it one of the best overlooked dividend stocks. In addition, it has been making regular payouts to shareholders for the past 84 years. The company also has a history of paying special dividends to shareholders. The stock supports a dividend yield of 3.11%, as of April 25.
3. Lincoln Electric Holdings, Inc. (NASDAQ:LECO)
Number of Hedge Fund Holders: 36
Lincoln Electric Holdings, Inc. (NASDAQ:LECO) is an Ohio-based multinational company that specializes in welding products. The company is also known for its proficiency in industrial automation and cutting equipment. Recently, the company has focused on expanding its industrial automation segment, anticipating significant growth and nearly $1 billion in revenue.
Lincoln Electric Holdings, Inc. (NASDAQ:LECO)’s strategy revolves around meeting customer demand and effectively managing costs. By delivering high-quality products and fostering strong brand loyalty, the company maintains a competitive edge in a mature industry. Its investment in technology and commitment to a skilled workforce further strengthen its market position.
In the fourth quarter of 2024, Lincoln Electric Holdings, Inc. (NASDAQ:LECO) reported revenue of $1.02 billion, down 3.45% from the same period last year. However, the revenue surpassed analysts’ estimates by over $26 million. Although enhanced operational efficiencies had a positive impact, macroeconomic challenges and fluctuations in industrial sector demand continued to pose potential risks. Special item charges and higher selling expenses led to a 10.5% year-over-year decline in net income, which totaled $140.2 million.
Lincoln Electric Holdings, Inc. (NASDAQ:LECO) ended the year with over $377 million in cash and cash equivalents. The company reported an operating cash flow of $95.8 million. In FY24, it returned $426 million to shareholders through dividends and share repurchases, affirming its commitment to shareholder return. In addition, it has been growing its payouts for 29 consecutive years. Currently, it pays a quarterly dividend of $0.75 per share for a dividend yield of 1.61%, as of April 25.
2. Cognex Corporation (NASDAQ:CGNX)
Number of Hedge Fund Holders: 37
Cognex Corporation (NASDAQ:CGNX) focuses on machine vision technology, serving key sectors such as automotive, logistics, and consumer electronics. Its recent product introductions, including VisionPro Deep Learning 4.0 and the AI-driven DataMan series, showcase its dedication to innovation. The company has also strengthened its market position through strategic acquisitions like Moritex, helping to drive growth in both established and emerging markets.
In the fourth quarter of 2024, Cognex Corporation (NASDAQ:CGNX) generated $229.7 million in revenues, which grew by 17% from the same period last year. The revenue exceeded analysts’ estimates by $9 million. The company’s operating income of $31 million showed a significant growth of 142% on a YoY basis.
Cognex Corporation (NASDAQ:CGNX) remained in a solid financial position, holding $587 million in cash and investments with no outstanding debt at the end of December 2024. During the fourth quarter of 2024, the company generated $51 million in cash from operating activities and recorded $49 million in free cash flow, representing year-over-year increases of $37 million and $42 million, respectively. Cognex allocated $43 million toward share repurchases and distributed $14 million in dividends to its shareholders. The company also indicated plans to continue buying back its common stock under the current repurchase program. It currently offers a quarterly dividend of $0.08 per share and has a dividend yield of 1.22%, as of April 25.
1. STERIS plc (NYSE:STE)
Number of Hedge Fund Holders: 48
STERIS plc (NYSE:STE) is an Ireland-based medical equipment company that specializes in sterilization and surgical products for the US healthcare system. The company is gaining traction among investors as healthcare systems rely on Steris’ products and services regardless of economic challenges, as they are essential for delivering care to patients. Since the start of 2025, the stock has surged by over 11%.
In fiscal Q3 2025, STERIS plc (NYSE:STE) posted revenue of $1.3 billion, down 1.8% from the same period last year. The company reported net income of $173.6 million, or $1.75 per diluted share, up from $148.4 million, or $1.49 per diluted share, in the same period of fiscal 2024. Healthcare revenue rose by 7% in the quarter, reaching $976.0 million, up from $916.2 million in the third quarter of fiscal 2024. This increase was driven by a 9% rise in consumable sales and a 13% boost in service revenue, partially offset by a 5% drop in capital equipment revenue.
For the first nine months of fiscal 2025, STERIS plc (NYSE:STE) reported a net cash from operations totaled $887.3 million, up from $718.5 million during the same period in fiscal 2024. Free cash flow also increased, reaching $588.1 million compared to $457.0 million in the previous year. It currently offers a quarterly dividend of $0.57 per share and has a dividend yield of 1.01%, as of April 25.
Overall, STERIS plc (NYSE:STE) ranks first on our list of the best overlooked dividend stocks to invest in. While we acknowledge the potential of STE as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than STE but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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