In this article, we will discuss some of the most profitable stocks that pay dividends.
When it comes to profits, dividend investing is the first thing that springs to mind. Dividends represent a portion of a company’s earnings paid out to its shareholders, and over the years, they’ve come to play a growing role in personal income, with their share increasing notably. According to a report by S&P Dow Jones Indices, dividends as a part of personal income has grown from 2.68% in Q4 1980 to 7.88% in Q2 2024, while net interest has fallen from 14.58% to 7.61% during the same timeframe. The report also mentioned that dividends made up more than one-third of the market’s total return from 1936 through 2024, with capital appreciation accounting for the other two-thirds.
With the market becoming turbulent today, investors are once again turning their attention to dividend stocks, which had largely been sidelined for the past two years. The last time dividend stocks had their moment was in 2022, but since then, they have been overshadowed by AI stocks. That said, dividend stocks are witnessing a renewed interest because of their stable characteristics. According to Jefferies, dividend-paying stocks can be a good choice in light of the Trump administration’s approach to tariffs. Desh Peramunetilleke, head of the quantitative strategy at Jefferies, emphasized that dividend stocks can make an impression during rough economic patches. His team also supported this idea, believing that dividend stocks would outperform this year, driven by high-quality yield stocks and defensive yield names. Peramunetilleke made the following comment on March 27 note:
“A study of past stagflation-like period shows that it is a headwind for equities, but dividend strategies tend to be more resilient. Since 2001, [bond proxies] and [high-quality yield] have outperformed the most during such periods in [the] U.S.”
Analysts like Peramunetilleke have noticed this renewed interest in dividends this year. The Dividend Aristocrat Index, which follows companies with at least a 25-year track record of dividend growth, has fallen by a little over 4% since the start of 2025, compared with a steeper decline in the broader market. Dividend-focused exchange-traded funds (ETFs) are also in the green. According to a report by Franklin Templeton, between August 2024 and January 2025, dividend ETFs listed in the US attracted average monthly net inflows of nearly $3.3 billion—marking a significant rise from just $107 million during the same stretch a year earlier.
The report also mentioned that dividend-focused strategies have repeatedly shown their ability to act as a defensive play, regardless of the region or market cycle. Over the three years ending December 31, 2024, companies that paid dividends experienced less volatility and smaller peak-to-trough declines than the broader market across global, US, and European benchmarks. When inflation concerns and interest rate jitters resurfaced in August 2024, dividend stocks proved more resilient than most, weathering the storm better than the wider market. Given this, we will take a look at some of the best profitable stocks that pay dividends.
Photo by Annie Spratt on Unsplash
Our Methodology
For this list, we screened for stable dividend companies that have strong dividend growth track records. From that group, we picked companies with a net profit margin exceeding 30%, which suggests sound financial health and excellent cost management. The stocks are ranked in ascending order of their net profit margin as of the most latest quarter.
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8. McDonald’s Corporation (NYSE:MCD)
Net Profit Margin: 31.73%
McDonald’s Corporation (NYSE:MCD) is a multinational fast food chain that operates nearly 43,000 locations globally. The company, recognized worldwide for its golden arches, is making a strong push into artificial intelligence, as highlighted by The Wall Street Journal. For a fast-food giant like McDonald’s, AI holds potential across various operations. Around 18 months ago, the company entered a partnership with Alphabet’s Google Cloud, placing a strong emphasis on AI. The company has already tested AI-powered ordering, and this collaboration may help the company scale up those efforts. If AI proves effective in handling orders, it could help cut down labor costs while improving the customer experience.
Despite its innovation drive, McDonald’s Corporation (NYSE:MCD)’s quarterly results came in below expectations, partly due to an E. Coli outbreak, though the company faced broader headwinds as well. In Q4 2024, revenue came in at $6.4 billion—a modest 0.2% dip year-over-year and nearly $88 million short of analyst forecasts. Global same-store sales, which reflect performance at established locations, inched up by 0.4%. However, US same-store sales dropped by 1.4%, indicating a slowdown in domestic growth and ongoing pressure to maintain momentum. However, it is one of the stocks that have shown positive returns this year, surging by over 2% since the start of 2025.
McDonald’s Corporation (NYSE:MCD) has a strong cash reserve with over $1 billion available in cash and cash equivalents at the end of FY24. The company has been growing its payouts for 48 consecutive years, which makes it one of the most profitable stocks on our list. It offers a quarterly dividend of $1.77 per share and has a dividend yield of 2.36%, as of April 6.
7. Abbott Laboratories (NYSE:ABT)
Net Profit Margin: 31.95%
Abbott Laboratories (NYSE:ABT) is an American medical device company that provides services and products in diagnostics, nutrition, and established pharmaceuticals. In the fourth quarter of 2024, the company reported $11 billion in revenue, reflecting a year-over-year increase of more than 7%. However, the results fell slightly short of Wall Street’s expectations, missing estimates by over $57 million. Despite this, the company demonstrated consistent growth throughout the year.
For the full year, Abbott Laboratories (NYSE:ABT) met the upper range of its original January projections for both organic sales growth and adjusted earnings per share. The company’s strong focus on research and development led to the launch of more than 15 new growth initiatives in 2024, including newly approved products and expanded indications for existing treatments. With a net profit margin of nearly 32%, ABT is one of the most profitable stocks that pay dividends.
Abbott Laboratories (NYSE:ABT) announced a quarterly dividend of $0.59 per share on February 21, which was in line with its previous dividend. Overall, the company holds a 53-year streak of consistent dividend growth. The stock supports a dividend yield of 1.9%, as of April 6.
At the end of Q4 2024, 66 hedge funds tracked by Insider Monkey held stakes in Abbott Laboratories (NYSE:ABT), growing from 63 in the previous quarter. The consolidated value of these stakes is more than $3.2 billion. With over 11.2 million shares, Fisher Asset Management was the company’s leading stakeholder in Q4.
6. Microsoft Corporation (NASDAQ:MSFT)
Net Profit Margin: 35.43%
An American multinational tech giant, Microsoft Corporation (NASDAQ:MSFT) ranks sixth on our list of the most profitable stocks that pay dividends. The company specializes in developing and marketing software, services, and hardware that aim to create new opportunities, enhance convenience, and add value to everyday life.
Microsoft Corporation (NASDAQ:MSFT) is a strong dividend payer, having increased its payouts for 19 consecutive years. The company’s quarterly dividend comes in at $0.83 per share and has a dividend yield of 0.92%, as recorded on April 6.
Microsoft Corporation (NASDAQ:MSFT) recently announced a ZAR 5.4 billion investment to expand its cloud and AI infrastructure in South Africa, reinforcing its dedication to digital transformation in emerging markets. This follows an earlier ZAR 20.4 billion investment in local data centers to improve cloud accessibility for businesses, government agencies, and startups.
In Q2 2025, Microsoft Corporation (NASDAQ:MSFT) posted $69.6 billion in revenue, marking a 12% year-over-year increase, while net income rose 10% to $24.1 billion. The company’s strong performance was driven by a 21% increase in cloud revenue, although Azure’s growth still faces some challenges. In contrast, AI services revenue surged by 157%, exceeding expectations. Microsoft remains financially robust, generating $22.2 billion in operating cash flow and ending the quarter with $17.4 billion in cash and cash equivalents. The company also returned $9.5 billion to shareholders through dividends and stock buybacks.
5. CubeSmart (NYSE:CUBE)
Net Profit Margin: 36.75%
CubeSmart (NYSE:CUBE) is a Pennsylvania-based real estate investment trust company that invests in self-storage facilities across the US. The company believes that the self-storage fundamentals in 2025 will align with the previous two years, as there is no clear catalyst for a significant acceleration. They view self-storage as a solid long-term business and feel confident in their ability to generate value through the ongoing development of their operating platform, innovative growth opportunities, and robust liquidity position.
In the fourth quarter of 2024, CubeSmart (NYSE:CUBE) reported revenue of $267.7 million, which showed a 0.98% growth from the same period last year. The revenue also beat analysts’ estimates by over $185,000. The company’s same-store net operating income (NOI) for 598 stores decreased by 3.7% compared to the previous year, primarily driven by a 1.6% drop in revenues and a 4.7% increase in operating expenses. The average same-store occupancy rate during the period was 89.6%, ending slightly lower at 89.3%. In addition, the company completed the acquisition of an 85% interest in joint ventures that own 14 stores for $157.3 million, as well as two individual stores for a total of $22.0 million.
CubeSmart (NYSE:CUBE) currently offers a quarterly dividend of $0.52 per share, having raised it by 2% in December 2024. This marked the company’s 16th consecutive year of dividend growth, which makes CUBE one of the most profitable stocks that pay dividends. As of April 6, the stock has a dividend yield of 5.26%.
4. Essex Property Trust, Inc. (NYSE:ESS)
Net Profit Margin: 45.72%
Essex Property Trust, Inc. (NYSE:ESS) is an American real estate investment trust company, headquartered in California. In the fourth quarter of 2024, the company reported a revenue of $452 million, reflecting a 7.9% increase compared to the same period last year. The company’s core Funds from Operations (CFFO) per diluted share reached $3.92, a 2.3% rise from the previous year, driven by strong same-property revenue growth.
Essex Property Trust, Inc. (NYSE:ESS) is popular among investors as the company continues to focus on high-demand coastal markets, where it has benefited from above-average rent growth. The company also leverages external growth opportunities and partnerships to acquire apartment communities.
For the full year of 2024, Essex Property Trust, Inc. (NYSE:ESS) generated cash proceeds of $108.8 million. By year-end, it had $1.3 billion in available liquidity, which included cash, cash equivalents, and marketable securities. On February 20, the company announced a 4.9% increase in its quarterly dividend to $2.57 per share, marking the 30th consecutive year of dividend growth. The stock supports a dividend yield of 3.79%, as of April 6.
3. Visa Inc. (NYSE:V)
Net Profit Margin: 54.27%
Visa Inc. (NYSE:V) is an American payment card service company, based in California. The company is currently undergoing a major transformation, shifting from being a payments leader to a more comprehensive financial infrastructure provider. By breaking down its platform and adopting open networks, Visa aims to become the foundation of the digital economy, enabling fintechs, banks, and businesses to leverage its capabilities. This flexible approach allows Visa to branch out into new payment systems, such as account-to-account (A2A) transfers, while maintaining the strength of its core business. The company sees a vast market opportunity in consumer payments, with $23 trillion still tied up in cash, checks, and outdated ACH systems.
Visa Inc. (NYSE:V) reported strong earnings for fiscal Q1 2025, with revenue reaching $9.5 billion, a 10% increase compared to the previous year. For the quarter ending December 31, 2024, Visa processed 63.8 billion transactions, an 11% rise year-over-year. Payment volume also grew by 9% on a constant-dollar basis compared to the same period last year.
Visa Inc. (NYSE:V) closed the quarter with a strong cash position, holding over $16 billion in cash and cash equivalents. Operating cash flow rose to $5.4 billion, up from $3.6 billion in the same quarter the previous year. The company also returned $5.1 billion to shareholders through dividends and stock buybacks. Currently, Visa pays a quarterly dividend of $0.59 per share, yielding 0.75% as of April 7. The company has been increasing its dividend payments to shareholders for the past 16 years, which makes it one of the most profitable stocks on our list.
2. Altria Group Inc. (NYSE:MO)
Net Profit Margin: 55.10%
Altria Group Inc. (NYSE:MO) ranks second on our list of the most profitable stocks that pay dividends. The Virginia-based tobacco company manufactures a wide range of related products, including cigarettes and other nicotine products. With smoking rates on the decline, the company is facing an uncertain future. While Altria offers a range of products in emerging categories, it lacks the dominant market position that Marlboro once held for many years. Even today, the company still relies heavily on cigarette sales, with combustible products accounting for more than 90% of its operating income last year.
In the fourth quarter of 2024, Altria Group Inc. (NYSE:MO) posted a revenue of $5.11 billion, marking a 1.63% increase from the previous year and surpassing analyst expectations by $59.6 million. The company saw higher earnings and improved margins in its core tobacco business, driven by strong brand performance. In addition, the company continued making strategic investments aimed at supporting long-term growth. For 2025, the company anticipates adjusted diluted EPS to range between $5.22 and $5.37, reflecting an expected growth of 2% to 5% compared to its 2024 EPS of $5.12.
Altria Group Inc. (NYSE:MO) has always remained committed to its shareholder obligation, returning $6.8 billion to investors through dividends in FY24. In addition, it has raised its payouts for 55 years straight. The company offers a quarterly dividend of $1.02 per share and has a dividend yield of 7.28%, as of April 6.
1. VICI Properties Inc. (NYSE:VICI)
Net Profit Margin: 70.70%
VICI Properties Inc. (NYSE:VICI) is a New York-based real estate investment trust company that mainly invests in casinos and entertainment properties across the US and Canada. On March 6, the company declared a quarterly dividend of $0.4325 per share, which was in line with its previous dividend. It has been raising its payouts every year since its IPO in 2018. This dividend growth streak is supported by a strong cash position. At the end of FY24, the company had $524.6 million available in cash and cash equivalents. It also returned $456.7 million to shareholders in dividends in Q4 2024. As of April 6, the stock has a dividend yield of 5.66%.
In the fourth quarter of 2024, VICI Properties Inc. (NYSE:VICI) reported revenues of $976 million, a 4.7% increase from the previous year. However, net income available to common stockholders fell by 17.8% year-over-year, totaling $614.6 million, and earnings per share dropped 19.2% to $0.58. This decline was mainly due to changes in the CECL allowance for the quarter ending December 31, 2024. Additionally, the company formed a new partnership with Indigenous Gaming Partners (IGP) as part of IGP’s acquisition of PURE Canadian Gaming’s operating assets, which also involved an amendment to the existing master lease for these properties.
On February 19, VICI Properties Inc. (NYSE:VICI) announced a strategic partnership with Cain International and Eldridge Industries, starting with a $300 million investment by VICI in a mezzanine loan for the development of the prestigious 17.5-acre mixed-use project, ‘One Beverly Hills’.
Overall, VICI Properties Inc. (NYSE:VICI) ranks first on our list of the best dividend stocks from the regional banking sector. While we acknowledge the potential of VICI 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 VICI 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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