In this article, we will take a look at some of the best dividend stocks on Robinhood.
The start of 2020 marked a turning point for retail trading, driven by increased market volatility, stay-at-home orders, and commission-free trading across platforms, which led to a surge in activity and a rise in new traders. Many of these new traders, particularly in their 20s and 30s, found the stock market more accessible than ever, as high prices had previously kept them from participating. With sports events canceled, many turned to stock trading as a replacement for sports betting.
As stock prices hit historic lows, younger investors flocked to platforms like Robinhood. Founded in 2013 by Vladimir Tenev and Baiju Bhatt, Robinhood quickly became a fintech favorite. The app, which pioneered commission-free trading, amassed 13 million user accounts and gained significant brand recognition, surpassing legacy brokerages like Charles Schwab and Fidelity, as well as app-first competitors like Webull and Dough.
According to analysts, Robinhood has significant growth potential, particularly if it can encourage customers who have opened accounts to invest larger sums of money on the platform. Piper Sandler analyst Patrick Moley highlighted that while 10% of US adults have a funded account with Robinhood, the company currently controls less than 0.3% of the $65 trillion in retail assets in the US As of June 2024, Robinhood has facilitated over $200 million in asset transfer and retirement account contribution matches for its customers. This initiative helped the company secure over $13 billion in net deposits during the second quarter, with assets under custody reaching a record $140 billion—an increase of 57% from the previous year. Additionally, retirement assets more than doubled, nearing $9 billion.
Though Robinhood experienced significant growth in its customer base during the COVID-19 pandemic, as people stayed home and invested in their government stimulus checks, years later, the platform has continued to attract even more customers, many of whom have become more knowledgeable and now expect advanced tools, which Robinhood has adapted to offer.
Robinhood has been focusing on organic growth by implementing strategies such as deposit matches and marketing initiatives, as well as investing in both its current operations and new ventures. Additionally, the company has been using mergers and acquisitions (M&A) to accelerate its business expansion.
In addition to technological improvements, shifts in asset classes and market structure have also played a role in the emergence of new investment products. One of the most notable innovations in 2024 was the introduction of event contracts, especially those based on elections. In addition, many other brokerages, fintech firms, and financial institutions introduced a wide range of new products that reshaped how retail investors could manage their investments, all while generating profits. The shift began in January when the Securities and Exchange Commission approved spot bitcoin (BTCUSD) exchange-traded funds. This decision enabled retail investors to gain cryptocurrency exposure through their brokerage accounts, eliminating the need to open digital wallets for direct crypto purchases.
That being said, we will now discuss some of the best dividend stocks on Robinhood.
Photo by Vitaly Taranov on Unsplash
Our Methodology:
For this article, we performed an extensive analysis of leading financial websites to identify 10 dividend stocks available on Robinhood. Our selection process was based on a consensus approach, where we considered only those stocks that consistently appeared across multiple sources during our research. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024. The stocks are ranked according to hedge funds having stakes in them.
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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 32
Altria Group, Inc. (NYSE:MO) is an American tobacco company that manufactures a wide range of related products including cigarettes and other nicotine products. In its recently announced Q4 2024 earnings, the company posted revenue of $5.11 billion, which showed a 1.63% growth from the same period last year. The revenue also beat analysts’ estimates by $59.6 million. Its top brands allowed its core tobacco businesses to achieve strong income growth and margin expansion, while also making strategic investments for the future. For 2025, the company anticipates delivering adjusted diluted earnings per share (EPS) between $5.22 and $5.37, reflecting a growth rate of 2% to 5% compared to the base of $5.12 in 2024.
The tobacco industry has experienced significant changes in recent years. While global smoking rates have declined, many consumers are opting for smoke-free alternatives like e-cigarettes and oral tobacco, which are perceived as less harmful and have gained popularity. Altria Group, Inc. (NYSE:MO), known for brands like Marlboro and Parliament, seems to be successfully adapting to these shifts by broadening its range of smoke-free products. In the past 12 months, the stock has surged by over 30%.
Altria Group, Inc. (NYSE:MO) has always remained committed to returning value to shareholders. In FY24, the company distributed $6.8 billion to investors through dividends. In addition, its dividend growth streak currently spans over 55 years, which makes it one of the best dividend stocks on our list. The company offers a quarterly dividend of $1.02 per share and has a dividend yield of 7.81%, as of January 30.
At the end of Q3 2024, 32 hedge funds tracked by Insider Monkey held stakes in Altria Group, Inc. (NYSE:MO), compared with 36 in the preceding quarter. These stakes have a total value of $2.27 billion. With over 22 million shares, Arrowstreet Capital was the company’s leading stakeholder in Q3.
9. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Holders: 32
Nucor Corporation (NYSE:NUE) is an American steel production company, based in North Carolina. The US steel industry is continuously evolving due to a mix of internal and external influences, offering the company opportunities to compete, adapt, and innovate. Nucor distinguishes itself by diversifying into higher-margin specialty products, such as data center racks and industrial garage doors, which help stabilize profitability beyond the cyclical nature of the steel market. Despite facing recent challenges, the company continues to be profitable, maintaining a manageable debt-to-equity ratio of 0.33. Its strategic approach of using downturns to make acquisitions and invest in assets positions it strongly for future growth. Since the start of 2025, the stock has surged by over 12%.
In the fourth quarter of 2024, Nucor Corporation (NYSE:NUE) reported revenue of $7.08 billion, which fell by over 8% from the same period last year. However, the revenue beat analysts’ estimates by $348 million. The management said that although steel demand weakened in 2024, market conditions are beginning to improve and are expected to gain momentum as 2025 progresses. The US economy is still at the beginning of several steel-intensive megatrends, and as the largest and most diversified steel producer in America, Nucor is well-positioned to meet these growing needs.
Nucor Corporation (NYSE:NUE) has grabbed investors’ attention because of its solid financial position and dividend policy. The company ended the quarter with over $4 billion available in cash and cash equivalents. Moreover, it generated nearly $4 billion in operating cash flow in FY24. In December 2024, the company declared a 1.9% increase in its quarterly dividend to $0.55 per share. This marked the company’s 52nd consecutive year of dividend growth, which makes NUE one of the best dividend stocks on Robinhood.
As of the close of Q3 2024, 32 hedge funds in Insider Monkey’s database owned stakes in Nucor Corporation (NYSE:NUE), down from 40 in the previous quarter. The overall value of these stakes is over $487 million. Among these hedge funds, D E Shaw was the company’s leading stakeholder in Q3.
8. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 36
Ford Motor Company (NYSE:F) is an American company that is engaged in the manufacturing, distribution, and sale of automobiles. Although the company has experienced a nearly 14% drop in the past 12 months, analysts don’t view it as negatively as it may appear. J.D. Power, a respected US data analytics and consumer intelligence firm, released its 2024 US Initial Quality Study earlier this year, highlighting Ford’s progress in recent years. The company saw a notable improvement, climbing 14 spots to secure 9th place on the list of brands with the fewest problems per 100 vehicles.
Ford Motor Company (NYSE:F) had a strong performance in 2024, reporting US sales of 2.08 million vehicles, marking a 4.2% increase from just under 2 million in 2023. The company’s electric vehicles saw a notable surge in demand, reaching a record 285,291 units, a 38% year-over-year increase, and surpassing the electrified vehicles of GM and Stellantis for the full year. As a result, electrified vehicles, including hybrids and EVs, made up 13.7% of Ford’s total US sales in 2024.
Ford Motor Company (NYSE:F) has a strong dividend history because of its stable cash position. In the most recent quarter, the company reported an operating cash flow of $5.5 billion and its free cash flow came in at $3.2 billion. It has also paid supplemental dividends to shareholders over the years to return value to shareholders. The company currently pays a quarterly dividend of $0.15 per share and has a dividend yield of 5.9%, as of January 30.
Insider Monkey’s database of Q3 2024 showed that 36 hedge funds held stakes in Ford Motor Company (NYSE:F), with a collective value of over $744.4 million.
7. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
International Business Machines Corporation (NYSE:IBM) ranks seventh on our list of the best dividend stocks on Robinhood. The company has transformed itself into a cloud and artificial intelligence (AI) leader. Its contributions to the hybrid cloud and the development of its Watsonx AI have positioned it as a key player in the technology sector. One aspect of IBM that has received less attention is its work in quantum computing. In many ways, IBM is a leader in this field, prompting some investors to consider whether this advanced technology makes IBM stock an attractive investment. In the past 12 months, the stock has surged by nearly 39%, outperforming the market by a wide margin.
In its recently announced Q4 2024 earnings, International Business Machines Corporation (NYSE:IBM) reported revenue of $17.6 billion, up 1% from the same period last year. The company finished the year with double-digit revenue growth in its Software segment for the quarter, driven by continued acceleration in Red Hat. Clients around the world are increasingly turning to IBM to help them transform using AI. The company’s generative AI business has now reached over $5 billion in total, marking an increase of nearly $2 billion from the previous quarter.
International Business Machines Corporation (NYSE:IBM)’s cash results also came in strong in 2024. During the year, the company generated $13.4 billion in operating cash flow and its free cash flow came in at $12.7 billion. In Q4 2024, it returned $1.5 billion to shareholders through dividends. The company currently offers a quarterly dividend of $1.67 per share and has a dividend yield of 2.61%, as of January 30. IBM has raised its payouts for 29 consecutive years.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 56 funds held stakes in International Business Machines Corporation (NYSE:IBM), up from 54 in the previous quarter. The consolidated value of these stakes is more than $1.7 billion.
6. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 57
Verizon Communications Inc. (NYSE:VZ) is an American multinational telecommunications company. It has grabbed the attention of investors over the years because of its consistent innovation and strong cash position. In FY24, the company reported an operating cash flow of $37 billion and a free cash flow of $19.8 billion, reflecting growth from $18.7 billion in the previous year. Analysts are optimistic about the company’s future, especially following its partnership with NVIDIA to create an AI-driven enterprise solution that supports efficient AI applications on its secure 5G private networks with private Mobile Edge Computing. In addition, the company is exploring other AI-driven initiatives, such as network slicing and satellite connectivity, to create new revenue streams and strengthen its competitive edge.
Verizon Communications Inc. (NYSE:VZ) recently reported its Q4 2024 earnings, posting revenue of $35.7 billion, reflecting a 1.6% increase compared to the same period last year. This growth was driven by strong customer additions in both mobile wireless and internet services. In the mobile wireless segment, the company added 568,000 net postpaid phone subscribers, up from 449,000 in the same quarter last year. Revenue for this segment grew 3.1% year-over-year, reaching $20 billion, marking the 18th consecutive quarter of growth.
Due to its stable cash position, Verizon Communications Inc. (NYSE:VZ) was able to increase its payouts for 18 consecutive years, which makes it one of the best dividend stocks on Robinhood. The company currently offers a quarterly dividend of $0.6775 per share. The stock’s dividend yield on January 30 came in at 1.88%.
According to Insider Monkey’s database of Q3 2024, 57 hedge funds owned investments in Verizon Communications Inc. (NYSE:VZ), worth over $3.2 billion in total. Rajiv Jain’s GQG Partners was the company’s leading stakeholder in Q3.
5. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 59
An American telecommunications company, AT&T Inc. (NYSE:T) provides a wide range of related services. In its Q4 2024 earnings, the company reported strong results, with revenue reaching $32.3 billion, up 0.6% compared to the same period last year. The company’s operating income was $5.3 billion, and its net income totaled $4.4 billion. AT&T saw 482,000 net additions in its postpaid phone segment, along with a projected industry-leading postpaid phone churn rate of 0.85%. Mobility service revenues grew 3.3% year-over-year to $16.6 billion. In addition, the company gained 307,000 net additions in its AT&T Fiber segment, marking the 20th consecutive quarter with net additions of 200,000 or more.
In the third quarter of 2024, AT&T Inc. (NYSE:T) announced the sale of its remaining 70% stake in DirecTV to private equity firm TPG, a transaction expected to produce significant cash flow for debt reduction and shareholder returns. With a robust financial standing, rising stock value, and an attractive dividend yield, the company is becoming an appealing option for investors looking for income-generating opportunities.
AT&T Inc. (NYSE:T)’s cash flow is stable enough to fulfill its dividend payments. In the most recent quarter, the company reported an operating cash flow of $11.9 billion and its free cash flow came in at $4.8 billion. It currently offers a quarterly dividend of $0.2775 per share and has a dividend yield of 4.68%, as of January 30.
As of the close of Q3 2024, 59 hedge funds in Insider Monkey’s database owned stakes in AT&T Inc. (NYSE:T), down from 71 in the previous quarter. The consolidated value of these stakes is over $5.6 billion.
4. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 75
Costco Wholesale Corporation (NASDAQ:COST) is an American retail company that offers a wide range of related products to its consumers. The company had an exceptional 2024, with its shares climbing nearly 39%. This strong performance is supported by its consistent growth, as it has maintained resilience even while other retailers faced challenges from rising costs.
In fiscal Q1 2025, Costco Wholesale Corporation (NASDAQ:COST) reported a revenue of $62 billion, reflecting a 7.5% year-over-year growth. The company’s net income increased to $1.8 billion, up from $1.6 billion in the previous year. Costco also ended the quarter with a robust cash position of nearly $11 billion in cash and cash equivalents, compared to $9.9 billion in the previous quarter. Furthermore, it generated $3.3 billion in operating cash flow.
Analysts are positive about Costco Wholesale Corporation (NASDAQ:COST)’s growth prospects and past performance, noting that the company has secured a premium over its competitors through consistent market share gains and its effective retailing-as-a-service model that generates reliable membership fees. The company has established a solid competitive edge through its retail strategy, which includes membership-based pricing and bulk discounts. This approach has helped attract a growing, loyal customer base worldwide, as demonstrated by its recent quarterly results.
On January 23, Costco Wholesale Corporation (NASDAQ:COST) declared a quarterly dividend of $1.16 per share, which was in line with its previous dividend. Overall, the company has been growing its payouts for 20 consecutive years, which makes COST one of the best dividend stocks on Robinhood. The stock has a dividend yield of 0.47%, as of January 30.
The number of hedge funds tracked by Insider Monkey holding stakes in Costco Wholesale Corporation (NASDAQ:COST) grew to 75 in Q3 2024, from 71 in the previous quarter. The total value of these stakes is over $5.4 billion. Among these hedge funds, Chilton Investment Company was one of the company’s leading stakeholders in Q3.
3. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 76
Starbucks Corporation (NASDAQ:SBUX) is a Washington-based multinational chain of coffeehouses and roastery reserves that specializes in a wide range of coffee beverages. The company is making significant efforts to refresh its brand and re-engage customers with its “Back to Starbucks” initiative, which focuses on improving operations and enhancing the in-store experience. This strategy highlights the company’s dedication to revitalizing its core identity, with expectations that it will positively influence stock performance as the company realigns with its foundational values. In the past 12 months, the stock has surged by nearly 16%.
In fiscal Q1 2025, Starbucks Corporation (NASDAQ:SBUX) reported consolidated net revenues of $9.4 billion, which remained unchanged compared to the previous year, even on a constant currency basis. In Q1, it opened 377 new stores, bringing the total number of stores to 40,576, with 53% being company-operated and 47% licensed. By the end of Q1, 61% of the company’s global store portfolio was located in the US and China, with 17,049 stores in the US and 7,685 stores in China.
Starbucks Corporation (NASDAQ:SBUX) is one of the best dividend stocks on Robinhood as the company has maintained 59 consecutive quarters of dividend payouts, achieving a compound annual growth rate (CAGR) of nearly 20% during this period, showcasing its dedication to consistently creating value for shareholders. In addition, it has raised its payouts for 14 consecutive years. The company offers a quarterly dividend of $0.61 per share and has a dividend yield of 2.27%, as of January 30.
At the end of Q3 2024, 76 hedge funds tracked by Insider Monkey held stakes in Starbucks Corporation (NASDAQ:SBUX), growing from 70 in the previous quarter. These stakes are worth over $3.2 billion in total. With over 11.7 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
2. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based pharmaceutical company that offers innovative health solutions to its consumers. The company has established itself as a leader in specialty pharmaceuticals and oncology, with its leading cancer medication, Keytruda, revolutionizing treatment methods and driving substantial revenue growth. Its strong market presence generates significant cash flow, which is then used to provide returns to shareholders. In the most recent quarter, Keytruda’s sales rose 17% compared to the previous year, reaching $7.4 billion.
Merck & Co., Inc. (NYSE:MRK) is making significant strides in diversifying its drug pipeline. Originally, it projected an additional $35 billion in revenue from its new drug portfolio at the start of 2024, but that estimate has now increased to $50 billion. This growth is mainly driven by a notable expansion in its clinical trials, with 26 phase III trials currently ongoing, up from just nine in 2021. Some of these trials have the potential to produce blockbuster drugs, especially in HIV treatments. In addition, the company has partnered with Gilead Sciences on a combination therapy that could revolutionize HIV care.
Merck & Co., Inc. (NYSE:MRK) is one of the best dividend stocks on Robinhood as the company maintains a 14-year streak of consistent dividend growth. The company’s quarterly dividend currently comes in at $0.81 per share and has a dividend yield of 3.28%, as of January 30.
Merck & Co., Inc. (NYSE:MRK) was included in 86 hedge fund portfolios at the end of Q3 2024, according to Insider Monkey’s database. The stakes owned by these funds are worth over $7.1 billion in total. With over 14.6 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech giant. The launch of DeepSeek’s R1 model has raised concerns for Microsoft, which has significant investments in OpenAI, the developer of the O1 series. However, the company’s CEO, Satya Nadella, known for his ability to pivot strategically, could turn this challenge into an opportunity. Nadella has previously embraced open-source strategies, such as adopting Chromium for Edge and expanding GitHub Copilot to support multiple AI models. In a market where AI is becoming increasingly commoditized, Microsoft’s Azure cloud platform could adapt by offering open-source models as APIs, integrating more cost-effective models like R1 into its offerings while maintaining appeal for enterprise customers. Although there may be short-term obstacles if OpenAI faces difficulties, Microsoft’s adaptability could position Azure as a leading player in the long run, even in a market with slimmer margins.
In fiscal Q2 2025, Microsoft Corporation (NASDAQ:MSFT) reported revenue of $69.6 billion, which showed a 12% growth from the same period last year. The company’s net income of $24.1 billion increased by 10% on a YoY basis. Microsoft 365 Commercial products and cloud services revenue grew by 15%, fueled by a 16% increase in Microsoft 365 Commercial cloud revenue.
Microsoft Corporation (NASDAQ:MSFT) also reported a strong cash position, ending the quarter with over $17.4 billion available in cash and cash equivalents. The company also generated $22.2 billion in operating cash flow, up from $18.8 billion in the prior-year period. It also returned $9.5 billion to investors through dividends and share repurchases. The company currently pays a quarterly dividend of $0.83 per share and has a dividend yield of 0.80%, as of January 30. It is one of the best dividend stocks on Robinhood with 19 consecutive years of dividend growth under its belt.
At the end of Q3 2024, 279 hedge funds tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), the same as in the previous quarter. These stakes have a total value of more than $91 billion. Among these hedge funds, Bill & Melinda Gates Foundation Trust was the company’s leading stakeholder in Q3.
Overall Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best dividend stocks on Robinhood. While we acknowledge the potential for MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
