3 Dividend Stocks with Growth on Tap for the Second Half

Key Points

• Amid stock market volatility, geopolitical tension, and sticky inflation, dividend-paying stocks offer investors a balance of safety and steady growth.
• IBM has grown its dividend for 30 consecutive years while expanding into AI and quantum computing, delivering a five-year total return exceeding 170%.
• Kinder Morgan and the Templeton Emerging Markets Fund both offer growing dividends and strong total returns despite volatile oil prices and global market swings.

In the 30 days ending July 8, the S&P 500 made a directional move of 1% or more four times. Some analysts will dismiss that as a consequence of large numbers. That is, the S&P 500 is over 7,500 points. Five years ago, that was around 4,300 and 10 years ago it was around 2,100.

But investors perceive that as volatility, and that has many seeking safety outside of the volatile artificial intelligence trade. It’s hard to fault that strategy. Investors (who are also consumers) are dealing with sticky inflation, which impacts the outlook for interest rates and consumer sentiment.

That would be enough, but investors also have to consider a tense geopolitical environment in the Middle East and Europe that suggests there may be many more directional moves of 1% or more in the S&P 500 for the remainder of 2026.

Dividend Stocks Balance Safety With Growth

Despite the market gyrations, many investors sleep well at night. Their investment strategy includes dividend-paying stocks, so their portfolio generates regular, passive income.

Many investors will dismiss dividend stocks as being too boring. It’s true that many of the best dividend stocks will not beat the performance of the S&P 500. That math doesn’t work for growth-oriented investors.

But for investors looking for safety in a turbulent market, dividend stocks offer an attractive balance of enough growth to go along with a safe, growing dividend. Whether investors reinvest the dividends or use the cash as supplemental income, these stocks do what they’re designed to do. Here are three names that have an attractive total return outlook in the second half of 2026.

IBM Delivers Dividend Growth Alongside AI Innovation

IBM NYSE: IBM has successfully pivoted from its hardware roots into a major player in cloud computing.

The company’s 2025 acquisition of Confluent is pushing it into the application layer of the AI stack, which gives IBM a direct hand in how enterprises feed live, real-time data into their AI models instead of just supplying the infrastructure underneath them.

IBM is also one of the large-cap names that is staking its claim in the quantum computing space. Not every name in this space will make it, but with its reputation and balance sheet, IBM shouldn’t be counted out.

In the last five years, IBM has delivered stock price growth of over 100%. However, the total return, which includes its dividend, is over 170%. IBM increased that dividend for its 30th consecutive year in April 2026.

For investors looking for a growth and value play in the technology sector, IBM is a name to consider.

Kinder Morgan Offers Reliable Income Despite Energy Price Volatility

The U.S. conflict with Iran has caused oil prices to move from above $100 to around $60 in the first half of the year. That kind of price movement in the underlying commodity has made some energy stocks as volatile as tech stocks.

That’s why investors may want to consider Kinder Morgan NYSE: KMI. The company is a midstream company. It’s responsible for transporting oil and natural gas through its extensive pipeline network, and its business is agnostic to oil and natural gas prices. The work is contracted and predictable, which is good for its customers as well as investors.

KMI is up approximately 17% in 2026 and has delivered a total return of over 150% in the last five years. It’s trading within about 7% of its consensus price target of $34.71. However, UBS Group recently reiterated its $43 price target for the stock.

Plus, Kinder Morgan’s dividend yields 3.7% as of this writing, and the company has increased the dividend for nine consecutive years.

Templeton Emerging Markets Fund Adds Global Growth and Dividend Income

The Templeton Emerging Markets Fund NYSE: EMF is a different avenue for investors looking to balance growth and safety. Heading into 2026, emerging markets were seen as a place to seek outsized performance. EMF is up about 34% in 2026.

Investing in emerging markets is important for a diversified portfolio. However, investing in companies outside the United States does require a different level of due diligence.

The Emerging Markets Fund uses a bottom-up, fundamental research approach to identify undervalued opportunities across local stock exchanges. The fund’s holdings span a range of industries, reducing the risk of any one country or sector.

The EMF pays a quarterly dividend that currently comes out to 90 cents per share on an annual basis. 

However, the company just increased its dividend to 24 cents per share in May. With a share price that’s around $22 as of this writing, investors have time to build a sizable position.