In this article, we will be looking into ten dividend stocks that have outperformed the market so far in 2025.
As in previous years, the dividend stocks are proving their value in 2025 by delivering returns at a comparatively higher rate than the benchmark index. Following a standout 2024, the market has also been facing a lot of turbulence in the past few weeks. However, some dividend-paying companies are holding themselves strong against this headwind, managing to reward the stockholders with income growth and capital appreciation. Thinking about the possibility of economic uncertainty leads investors to prioritize stability, and our list holds the 10 dividend stocks, which they may just be looking for.
The previous decade witnessed the growth stocks dominating the headlines, mainly as tech leaders delivering astounding returns. The tightening monetary policies and elevated interest rates have been pushing investors to shift their focus instead toward income-generating assets in recent years. A report by S&P Global anticipates a 7% increase in the total U.S. dividends in 2025, reaching a value of $784 billion, making the cash flows from the dividend stocks more appealing in an unpredictable economic environment.
READ ALSO: Dividend Stock Portfolio For Income: Top 10 Stocks to Buy
Historically, dividend stocks have been the go-to investment for investors when there is an economic slowdown. For instance, during the 2008 financial crisis and even the Covid-19 downturn, the dividend payers cushioned the impact of market volatility. Once again, such resilience, demonstrated by the dividend stocks, helps in understanding why investors are leaning toward reliable dividend payers in 2025. This preference for stability, however, is not solely driven by historical precedent, with the current economic climate also playing a significant role.
Interest rate changes have been among the significant factors driving the success of dividend stocks. An increase in the interest rates in 2022 and 2023 made borrowing expensive. However, with the cautious stance of the Federal Reserve in 2025, companies with more substantial balance sheets and sustainable dividends are increasingly thriving. Though this indicates the worthiness of dividend-paying stocks, it also cautions the investors against risky stocks, thereby raising the question of distinguishing between thriving dividend-payers and those posing potential risk.
Of course, not all dividend stocks are created equal. While some companies offer high but unsustainable yields, some show consistent payout growth, making the latter more attractive for long-term investments. Hence, the dividend growth, payout ratio, financial health, current operational status, future potentials, and the analyst’s outlook for the company must all be considered before deciding on a worthy investment.
Applying these rigorous criteria, 2025 can be an exceptional year for a select group of dividend-paying stocks. The companies on our list are not just paying dividends. They are growing them. Without further ado, we will dive into 10 dividend stocks outperforming the market this year. Stick with us as we count these stocks from 10 to 1 and highlight why they stand out in the investment market. The top five hold a few unexpected contenders.
A stock market graph. Photo by energepic.com
Our Methodology
We set a few key criteria to find the best dividend stocks outperforming the market in 2025. First, we only considered companies with a market cap of at least $1 billion. This is to make sure that the companies in our list are financially strong. Next, we looked for stocks with a year-to-date (YTD) return higher than 1.46%. Also, each stock had to offer a dividend yield of at least 4%, since we wanted our list to be appealing for income-focused investors. In addition to these criteria, while exploring the stocks, we looked into dividend yield, payout ratio, and the number of hedge funds holding to create a list that would benefit the readers. The stocks are ranked according to their dividend yields.
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. Rexford Industrial Realty, Inc. (NYSE:REXR)
Dividend yield: 4.16%
Dividend payout ratio: 139.17%
Ex-Dividend Date: March 31, 2025
Number of Hedge Funds: 24
Rexford Industrial Realty, Inc. (NYSE:REXR) is a self-administered, self-managed, full-service real estate investment trust operating from California, U.S. The company primarily focuses on transforming industrial real estate across infill Southern California. This differentiated strategy, along with the company’s proprietary value creation and asset management capabilities, leads to the development of internal and external growth opportunities.
As of February 28, 2025, the company’s year-to-date growth stood at 6.88%. The fourth quarter earnings call highlighted a 7% increase in the funds from operations (FFO) per share during 2024. Rexford (NYSE:REXR) also reported a lease of 1 million square feet in the Q4 of 2024, with a 55% increase in rental rates after accounting for concessions such as free rent or tenant improvements and a 41% increase in rental rates from previous leases to new leases. Additionally, the $1.5 billion worth of acquisitions completed in 2024 is expected to generate a 5.6% unlevered stabilized yield. The market reception of the company’s performance translates to a positive outlook.
Rexford (NYSE:REXR) offers a 4.16% dividend yield but carries a high payout ratio of 139.17%, which may raise concerns regarding the company’s ability to meet its debt obligations and invest in upcoming business opportunities. The stock has attracted 24 hedge funds listed in the Insider Monkey database, as of Q4 2024.
Analysts maintain a Hold rating, with a 1-year median price target of $45 projecting an 8.91% upside. Investors can purchase shares before March 31, 2025, and benefit from the upcoming dividend payout.
9. Nutrien Ltd. (NYSE:NTR)
Dividend yield: 4.16%
Dividend payout ratio: 158.82%
Ex-Dividend Date: March 31, 2025
Number of Hedge Funds: 37
The Canadian fertilizer company, Nutrien Ltd. (NYSE:NTR) is manufacturing and distributing nearly 26 million tonnes of potash, nitrogen, and phosphate products globally. Their customer segment is comprised of agricultural, industrial, and feed customers across the world.
The company saw an increase of 18.52% in its year-to-date ending February 28, 2025. It was majorly contributed by the investors’ sentiment towards the agricultural and fertilizer sector, which was less volatile than other sectors. Nutrien (NYSE:NTR) saw an increase in fertilizer sales volume of 1 million tonnes, with the retail adjusted EBIT up by 16% from the previous year. The company has raised its dividends 7 times since 2018, bringing its current dividend to a 38% increase in the last 7 years. The company’s progress in the nitrogen brownfield expansions at two North American sites is expected to increase production capabilities.
Nutrien Ltd. (NYSE:NTR) offers a dividend yield of 4.16%. The payout ratio stands high at 158.82%, raising sustainability concerns. The stock has seen engagement from 37 hedge funds acknowledged in the Insider Monkey Q4 2024 database, suggesting heavy institutional backing.
Analysts hold a consensus Buy rating, with a 1-year median price target of $60. The projected potential gain is 14.59% of the current price. The next ex-dividend date for those tracking distributions is March 31, 2025.
