The 4 Dividend Stocks Smart Money Is Grabbing Right Now

Key Points

• Bond yields are attractive but won't last forever; high-yield stocks are the answer.
• The stocks on this list all yield at least 4% as of mid-2025 and are likely to increase their distributions over time.
• Each has a tailwind for the price action that can result in a double-digit annual total over the next decade. 

Bonds remain attractive in 2025 with the yield on the 10-year treasury running in the low-to-mid 4% range. However, as slow as the pace may be, the FOMC is on track to begin reducing interest rates this year and bring them back to a “normalized” level over time. That means a decline of approximately 2%, which is about half the current base rate, suggesting a similar decline in bond yields. 

The obvious workaround is high-yield stocks, and there have been few times as good as mid-2025 to buy them. Names like Verizon NYSE: VZ, Stanley Black & Decker NYSE: SWK, The J.M. Smucker Company NYSE: SJM, and PepsiCo NASDAQ: PEP are trading near historically low valuations, paying at least 4% (if not significantly more), and have a tailwind to support share price rebounds that have already begun. Their yields will remain steady over the coming years, and they are expected to grow while their share prices increase. 

Verizon Raises Profit Guidance: Improves Balance Sheet Health

Verizon’s Q2 2025 earnings report wowed the market with strength in all reporting segments, improved margin, increased cash flow, and a healthier balance sheet.

Among the drivers in the second half will be the improved guidance, which is expecting additional earnings quality improvement as the year progresses.

Verizon’s 6.5% dividend yield in mid-2025 is boosted by a mid-single-digit equity gain, adding leverage to the share price. 

Regarding the business outlook, Verizon expects a modest single-digit growth pace in 2025, with analysts forecasting a slight acceleration and margin improvement in the coming years.

Concerning valuation and stock price outlook, Verizon is a deep value, trading below 10x earnings, while analyst trends suggest this market will see a double-digit price increase. 

Stanley Black & Decker: Ten-Year Low Equals Generational Opportunity

SWK shares hit a decade low in early summer, opening up a generational buying opportunity.

While headwinds are currently impacting results, the outlook is for broadening economic activity over the next few quarters, leading to improved results for industrial stocks.

As it stands, the consensus reported by MarketBeat assumes a low single-digit decline in 2025 with earnings sufficient to sustain the dividend.

Stanley Black & Decker pays about 4.75% and will likely sustain its low single-digit CAGR for the foreseeable future.

The company’s cash flow is diminished but sufficient to sustain the payments and the company's health until economic activity picks up. 

J.M. Smucker Company Has 1 Sweet Yield 

J.M. Smucker Company’s Q1 guidance update sent the share price to a five-year low, where the market confirmed significant support.

That is because the dividend yield moved above 4% to historically high levels, and it is as safe and reliable as ever.

The payment accounts for approximately 40% of the earnings outlook, and the balance sheet is in good health.

The analyst trends suggest SJM stock price will rebound strongly in the back half.

They reduced price targets earlier in the year, but MarketBeat tracks several new reports, upgrades and price target improvements late in Q2 and in early Q3.

They put the stock in the $117 to $130 range, or a 20% upside at the high end. 

PepsiCo Fires Trend-Following Signal

PepsiCo’s Q2 results weren’t spectacular, but they reveal that the company is back on track, firing on all cylinders, and is well-positioned to meet its long-term goals.

Highlights reveal the strength of its diversified growth strategy, with the top line up 1% despite expectations for contraction, driven by growth in food and international markets, offset by tepid results in beverages.

The critical detail is that revenue, margin, and cash flow were sufficient to cover the capital return, including the dividend and share repurchases, while maintaining a healthy balance sheet. 

PepsiCo’s dividend yield is substantial in 2025, topping 4% in mid-July and falling slightly in the wake of the Q2 release. It is expected to grow annually at a moderate single-digit pace for the foreseeable future, and buybacks will compound shareholder value.

The buyback pace in the first half reduced the count by nearly half a percent and is expected to continue for the foreseeable future.