If you’re just starting to invest in the stock market, but you’d like a little safety buffer, dividend stocks are a great place to start.
Many stocks provide just one source of returns: price gains. Dividend stocks, however, not only have the potential for price appreciation, but they also deliver a second source of returns (cash payments to shareholders) that you’ll typically receive no matter what the stock’s price is doing.
But sorting out the best dividend stocks for beginners requires us to be a little picky.
Some dividend stocks have small payouts that they never raise. So you’re getting a little bit from that second source of return, but not much, and it’s losing ground to inflation every year. On the other side of the spectrum are dividend stocks with massive yields but that pay out more than they can afford to; the risk there is a dividend reduction or even suspension. Not to mention, if you focus too much on income and not enough on the business, you could end up buying shares in a company that doesn’t really have any growth prospects—so while you might get the cash, you might not get much else.
Today, I’ll look at what we believe are nine of the top dividend stocks for beginners. After that, I’ll point you toward a trio of “bonus” picks that don’t pay on U.S. stocks’ usual quarterly schedule, but each and every month. I’ll also help new income investors acclimate to the space by explaining some of the basics, which will help you identify new dividend opportunities in the future.
Editor’s Note: Tabular data presented in this article is up-to-date as of June 29, 2026.
Featured Financial Products
Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.
Table of Contents
What Is Dividend Yield?

The most looked-at metric in the dividend universe is known as dividend yield. This simple financial ratio tells you the percentage of a company’s share price that is paid out across a year’s worth of dividend distributions.
Expressed as a mathematical equation, it’s:
Dividend yield = annual dividend / price x 100
Dividend yield normalizes dividend payments regardless of stock price, different quarterly payments, even different payment frequencies (like monthly or annually). For instance, each of the following fictional stocks all have a dividend yield of 2%:
- Alpha Corp. currently trades for $50 a share. It pays a 25¢ quarterly dividend, for $1.00 per year in full. ($1 / $50 x 100 = 2.0%)
- Beta Inc. pays $1 in the first quarter, $2 in Q2, $3 in Q3 and $4 in Q4. That’s $10 in dividends for the full year. It trades for $500 a share. ($10 / $500 x 100 = 2.0%)
- Gamma Ltd. pays $2.00 just once per year. It trades for $100 a share. ($2.00 / $100 x 100 = 2.0%)
Dividend yield helps you focus on the percent of your initial investment that you get back, and allows you to compare apples to apples.
Related: The Best Dividend Stocks: 10 Pro-Grade Income Picks for 2026
2 Ways Yields Grow: Higher Dividends … or Falling Prices
If you follow this math a step further, you’ll discover that a company can suddenly reach a very high dividend yield in two very different ways: 1.) the dividend growing very rapidly … or 2.) the share price falling very quickly.
Let’s say Alpha Corp., which trades for $50 per share, pays a 25¢ quarterly dividend that yields 2.0%. In a month, it yields 4.0%. Here are two ways that could have happened:
- Alpha Corp. doubled its dividend to 50¢ per share, for a full $2 per share across the year. The share price stays the same. ($2 / $50 x 100 = 4.0%)
- Alpha Corp. kept its dividend the same, but its share price plunged in half to $25 per share. ($1 / $25 x 100 = 4.0%)
Clearly, that 4% yield appears to be much safer and reliable in one scenario than the other.
Related: Fed Keeps Rates Steady as Expected, But With Decades-High Dissent
How Does Dividend Growth Work?

Yield is normally a function of what we know now—not how a business might change in the future. Many companies exhibit dividend growth over time.
There’s no universal rule about how companies might raise or reduce their payments, but dividend stocks often tie these profit sharing plans to earnings growth.
In other words: If a company is making more profits, then they have more cash to spread around to shareholders. And if they hit a serious snag, there’s a chance dividends could be cut or eliminated to shore up finances.
Like Young and the Invested’s content? Be sure to follow us.
What Is a Dividend Payout Ratio?
As with dividend yield, it’s important to normalize the dividend payout ratio for a stock. This is simply the percentage of a company’s earnings per share that is being distributed via dividends. It’s calculated as:
Payout ratio = dividends per share / earnings per share x 100
As an example, a stock that makes $100 million in profits and has 10 million shares of public stock has $10 in earnings per share. And if that company pays $5 annually in dividends, it has a payout ratio of 50% ($5 / $10 x 100 = 50%).
Related: The 12 Best Vanguard ETFs for 2026 [Build a Low-Cost Portfolio]
What Is Dividend Yield “on Cost”?
When you look up a stock’s information, the dividend yield listed is based on the most recent dividend and the current stock price. That yield is often actually different than the one current shareholders enjoy.
The payout based on what you paid, at the moment you invested, is your “yield on cost.”
Let’s say you buy a stock at $100, and it pays $1 per share. It yields 1.0% when you buy it ($1 / $100 x 100 = 1.0%).
In a year, that stock has doubled to $200 per share, and it also doubled its dividend to $2 per share. If you look up its information, its dividend is still 1.0% ($2 / $200 x 100 = 1.0%).
That’s not your yield on cost, however. You’re still receiving that higher dividend of $2 per share. But your cost basis is still the original $100 you bought the share at. So now, your yield on cost has doubled, to 2.0% ($2 / $100 * 100 = 2.0%)!
Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested’s free retirement planning newsletter.
9 Great Dividend Stocks for Beginners

If you think all this math is tedious, you’re not alone! But remember: Not all dividend stocks look alike. They come in all shapes and sizes, and metrics like dividend yield and payout ratio help investors make more informed decisions.
As with many things on Wall Street, it’s misleading to look at just a single number in a vacuum. Whether you’re investigating share price or dividend payments or earnings per share, these metrics only matter when you can compare them fairly with another company’s performance.
Now that you have a basic understanding of how companies pay dividends and why measures like dividend yield are important, let’s move on to some of the best dividend stocks for beginners. I’ll start with nine “core” income picks, then move on to the monthly dividend payers.
Stocks are listed in order of yield, from lowest to highest.
Related: 8 Best High-Yield Dividend Stocks: The Pros’ Picks
9. Broadcom
- Sector: Technology
- Market cap: $1.7 trillion
- Dividend yield: 0.7%
Broadcom (AVGO) is one of the best examples of the power of dividend growth.
Broadcom is one of the world’s largest semiconductor companies. It designs, develops, manufactures, and supplies semiconductor and infrastructure software products for a wide variety of uses. Artificial intelligence (AI) is first to mind, but its chips also power datacenters, networking, wireless, storage, industrial automation, and much more.
The company has been an innovator in its own right, but you can also chalk up much of its scale to a history of aggressive merger-and-acquisition (M&A) activity. The company—itself the product of a 2016 merger between Broadcom Corporation and Avago Technologies (hence the AVGO ticker)—has swallowed up the likes of LSI Corporation, Brocade, CA Technologies, VMware, and Symantec’s enterprise security business.
Related: The 10 Best Fidelity ETFs You Can Buy [Invest Tactically]
Technology stocks as a group don’t deliver much in the way of dividend yield. Indeed, many of the largest and most dynamic companies out there—such as Advanced Micro Devices (AMD) or Adobe (ADBE)—don’t pay a penny in dividends. That’s because they need to cycle every last cent of profits back into research, development, and other areas that will help further grow the business.
But a few technology stocks pay dividends, and Broadcom is among the more noteworthy ones. Sure, it has a sub-1% yield, which is far from ideal. But Broadcom makes up for that with intense dividend growth, and that so far has been extremely rewarding to patient shareholders.
AVGO has improved its quarterly payout by nearly 30% annually on average since the Avago-Broadcom merger in 2016. From a practical perspective, here’s what that looks like: Accounting for Broadcom’s 2024 10-for-1 stock split, someone in 2016 who bought right after the merger (at a split-adjusted $13 per share or so) did so at a headline yield of roughly 1.4%. Not only have shares delivered a total return (price plus dividends) of around 2,720% since then, but they’re earning an insane yield on cost of 20%!
Despite all that, the dividend represents less than 25% of Broadcom’s expected 2026 profits, leaving all sorts of money to pay for more R&D … and plenty of room to keep expanding the dividend, too.
Make Young and the Invested your preferred news source on Google
Simply go to your preferences page and select the ✓ box for Young and the Invested. Once you’ve made this update, you’ll see Young and the Invested show up more often in Google’s “Top Stories” feed, as well as in a dedicated “From Your Sources” section on Google’s search results page.
8. Equinix

- Sector: Real estate
- Market cap: $106.4 billion
- Dividend yield: 1.8%
I just got done saying that tech stocks often don’t make for good dividend investments. Most startups need to invest aggressively in new staff or new products rather than share profits with investors, and even established tech companies tend to prioritize growth over dividends.
What makes Equinix (EQIX) such an interesting dividend stock, however, is that it’s a kind of hybrid between a traditional income investment and a tech operation.
EQIX is a real estate investment trust (REIT)—a special class of company that involves property owners and operators. These companies receive special tax considerations, and in return, they must distribute at least 90% of their earnings back to shareholders as dividends.
Related: 8 Best T. Rowe Price Funds to Buy Now
This particular real estate investment owns data center properties. And it has a lot of reliability, charging regular rent to deep-pocketed tenants who want to buy server space in Equinix’s digital infrastructure empire. After all, everyone wants their data to live on “the cloud,” but the physical hardware to host that data has to live somewhere—and that somewhere is on Equinix’s properties.
Equinix boasts 513,000 interconnections to more than 10,500 customers. It’s the leader in its field, boasting consistent revenue growth. And dividend investors can appreciate its growing and extremely well-covered payout that’s only about half of expected 2026 adjusted funds from operations (FFO, a common REIT metric of profitability). Indeed, EQIX raised its payout in February 2026, by 10% to $5.16 per share.
More robust dividend growth could very well be in the cards for years to come, especially if Equinix continues to expand its top and bottom lines.
Related: 8 Best High-Yield Dividend ETFs for Income-Hungry Investors
Featured Financial Products
7. Bank of America
- Sector: Financials
- Market cap: $413.2 billion
- Dividend yield: 1.9%
Bank of America (BAC) is one of the world’s largest banks, serving roughly 70 million Americans through 3,500 branches and more than 15,000 ATMs across 39 states and Washington, D.C. However, Bank of America is much, much more than its consumer business—it also provides financial products and services for small and midsized businesses, large corporations, institutional investors, and even governments.
That breadth of business means a breadth of offerings, which range from checking and savings accounts to commercial loans, trade finance, treasury management, and securities clearing.
Related: 11 Best Vanguard Funds for the Everyday Investor
The financial crisis of 2008 rocked most of the financial sector, BofA included. Bank of America was forced to cut its dividend from 64¢ per share in 2008 to a mere penny per share in 2009. BAC started to raise its payout again in 2014, though.
True, on a nominal basis, the dividend still hasn’t returned to pre-Great Recession levels; however, at 28¢ per share after its last increase announced in July 2025, the stock still yields nearly 2%, which is above the financial-sector average. And by payout ratio, the dividend looks plenty secure, representing only a quarter of analysts’ estimates for BAC profits in 2026.
Bank of America’s roots go all the way back to 1784, and it’s one of the largest U.S. banks by assets. If you’re a long-term income investor, BAC is a financial stock you can believe in for many years to come.
Related: 8 Best Stock Picking Services, Subscriptions, & Sites
6. Johnson & Johnson
- Sector: Healthcare
- Market cap: $617.0 billion
- Dividend yield: 2.1%
Many of the best dividend stocks for beginners also happen to be called “widow-and-orphan” investments. That’s because they’re the kind of assets you buy and hold forever—or at least until you die and pass them on as inheritance.
A grim nickname, I realize, but it’s a compliment. And Johnson & Johnson (JNJ) is a prime example. It is among the 25 largest companies on Wall Street, with a massive brand and more than 135 years of operations.
Related: The 10 Best Dividend ETFs [Get Income + Diversify]
It was long a consumer-health giant, but in 2023, JNJ spun off those operations—which included the likes of Tylenol and Band-Aid—into Kenvue (KVUE). But while that modestly reduced the overall footprint of the company, it also sharpened its focus on high-margin drugs and medical devices to ensure future success. Now, the top and bottom lines are driven by products such as inflammation treatment Stelara, multiple myeloma drug Darzalex, and medical technologies such as electrophysiology, biosurgery, and wound closure products.
This company is deeply embedded in the healthcare system, and that helps maintain JNJ’s status as a top dividend stock that income investors can rely on through any market environment.
Related: The 8 Best Vanguard Index Funds for Beginners
From a dividend perspective, the healthcare giant has raised its payouts for 64 years running—one of the longest track records on Wall Street. That puts it in the ranks of both the Dividend Aristocrats (companies that have raised their dividends for at least 25 consecutive years) and the Dividend Kings (at least 50 years).
So it too is a Dividend King. But JNJ still has a payout ratio of just 45%, implying there’s ample headroom for future increases, too.
Johnson & Johnson is also one of the most credit-worthy companies in the world, ranking as one of just two U.S. companies with a top AAA rating for its corporate debt. Microsoft (MSFT) is the other, if you’re curious.
Make sure you sign up for The Weekend Tea, Young and the Invested’s free weekly newsletter that over 10k monthly readers use to level up their money know-how.
5. Coca-Cola

- Sector: Consumer staples
- Market cap: $358.3 billion
- Dividend yield: 2.6%
Beverage maker Coca-Cola (KO) is another global consumer staples titan—one with more than 130 years of operating history, and operations in 200 nations around the world.
While it’s true that sugary soft drinks might not be a growth business in an age of healthy eating, it’s important to understand that Coke products have strong baseline demand. More important to understand is that Coke is far more than just Coke: This multibillion-dollar powerhouse owns a massive stable of beverage brands, including Vitaminwater, Fuze teas, Powerade energy drinks, Minute Maid juices, Fairlife milks, and many more.
Related: The Full List of America’s Dividend Kings
I’ll also point out that Coca-Cola has a great deal of institutional (large-investor) demand. Berkshire Hathaway (BRK.B)—the holding company founded by the world’s most famous investor, Warren Buffett—is KO’s largest shareholder. Berkshire holds more than 9% of the company, providing a strong foundation for share prices as well as a mandate for generous and consistent dividends.
That shows in the track record of KO stock: In March 2026, the company approved its 65th consecutive annual dividend increase, making it a Dividend King as well. And as far as future dividend growth is concerned? While Coca-Cola’s 65% payout ratio is elevated, it’s not dangerously high. So while you might not expect a breakneck pace of dividend hikes going forward, KO likely will continue to nudge its distribution higher.
Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested’s free retirement planning newsletter.
4. Procter & Gamble
- Sector: Consumer staples
- Market cap: $344.8 billion
- Dividend yield: 2.9%
Consumer staples stocks—companies that make goods that are basic necessities—are some of the best dividend stocks for beginners because they aren’t prone to the ups and downs of discretionary companies. When times get tough, households spend less on vacations or designer jeans, but they keep going to the grocery store every week.
And when it comes to consumer stocks, Procter & Gamble (PG) is a powerhouse that’s hard to top.
Like Young and the Invested’s content? Be sure to follow us.
Procter & Gamble got its start in 1837, when it was producing soap and candles. Today, it’s a global consumer-goods behemoth that boasts more than 60 brands, which include roughly two dozen brands that generate at least $1 billion in annual revenues. P&G’s stable is a who’s who of grocery-store staples: Cheer and Tide laundry detergent, Downy fabric softeners, Luvs and Pampers diapers, Bounty paper towels, Charmin toilet paper, Puffs facial tissues, Tampax tampons, Gillette razors, Cascade dishwasher detergent … you get the point.
The company continues to innovate, even with its legacy brands. The company is currently expanding distribution of its recently created Tide evo—detergent in a tile form that requires no extra water and less packaging, helping P&G preserve the profit margins that helps it deliver a longstanding and growing dividend.
Procter & Gamble has one of the most storied dividend histories, including an incredible 136 consecutive years’ worth of cash distributions and 70 uninterrupted years of dividend growth, putting it in the ranks of both the Dividend Aristocrats and Kings. P&G’s most recent hike was a 3% raise, to $1.0885 per share quarterly, announced in April 2026.
Beginner investors could hardly do better than this vaunted dividend grower for both stability and income.
Related: The 16 Best ETFs to Buy Right Now
Need Help Picking Stocks? Consider These Top-Rated Services
|
Primary Rating:
4.7
|
Primary Rating:
4.8
|
Primary Rating:
4.2
|
|
$99/yr. ($100 first-year savings)
|
Premium: 7-day free trial, then $224/yr. ($74 discount)* Pro: 1 month for $89, then $2,149/yr.**
|
30-day free trial, then $249/yr.
|
3. Consolidated Edison
- Sector: Utilities
- Market cap: $41.2 billion
- Dividend yield: 3.1%
Utilities are another sector to consider when looking for the top dividend stocks. Electricity and water are just as important as groceries and cleaning products, and the expensive infrastructure and highly regulated nature of publicly traded utilities means competition is hard to come by. In truth, most U.S. electricity companies are virtual regional monopolies with incredibly consistent demand for their products.
That’s what makes a stock like Consolidated Edison (ED) so attractive to income investors.
Related: 8 Best-in-Class Bond Funds to Buy
“ConEd” and its subsidiaries distribute electricity to about 4 million customers in New York City, as well as several other counties in New York State and New Jersey; and distribute natural gas to 1.2 million more. This dense area of the U.S. is certainly not going to be less reliant on energy anytime soon, translating into a nearly certain stream of revenue for this dividend stock.
This consistency has allowed ConEd, another Dividend King, to provide 52 years of consecutive dividend increases to its stockholders. Like with Coca-Cola, the payout ratio is on the high-ish side. However, it’s still plenty manageable at less than 60% of projections for this year’s earnings, and Edison features extremely stable earnings that can slowly but persistently grow over time—allowing its dividend to expand the same way.
Featured Financial Products
Related: 10 Best Schwab ETFs to Buy [Build Your Core for Cheap]
2. Prudential Financial

- Sector: Financials
- Market cap: $37.7 billion
- Dividend yield: 5.2%
Some investors in dividend stocks might not see big banks as attractive as they once were in decades past. That’s OK. Prudential Financial (PRU) offers exposure to the financial sector in a different and more subdued way.
While Prudential does offer wealth management services, its core business comes from rather boring business lines such as life insurance and benefit administration for corporations. Unlike a big investment bank, there’s not really a lot of potential for windfall profits here. It’s just the mundane business of collecting premiums or helping small businesses manage their 401(k) plans.
Related: The 7 Best Gold ETFs You Can Buy
That said, these admittedly boring business lines provide a lot of stability to operations. Prudential has steadily ratcheted up its paydays lately as a result, with its dividends soaring from 70¢ per share quarterly in 2016 to $1.40 presently. That kind of growth over the past decade or so should make anyone pay attention, even if the company isn’t as dynamic as other financial firms.
The icing on the cake? Even with the second highest yield on this list, Prudential has a dividend payout ratio of around 40% of its projected profits for 2026. That means those big-time increases in payouts aren’t just sustainable, but also have room for continued dividend growth in the years ahead.
Related: 9 Apps With Free Stocks for Signing Up [Get Free Shares]
1. Verizon Communications
- Sector: Communication services
- Market cap: $180.3 billion
- Dividend yield: 6.6%
Verizon Communications (VZ) frequently graces the top spot on our list of dividend stocks for beginners. That’s because it has staying power.
It is the No. 1 wireless carrier in America right now, ahead of “Big Three” mates AT&T (T) and T-Mobile US (TMUS). And while there’s occasionally changes in the pole position, we live in an era in which mobile connectivity is a must-have for consumers and businesses alike—meaning there’s little chance of any widespread rollback in customers that would affect this pseudo-triopoly.
Like Young and the Invested’s content? Be sure to follow us.
What’s more, rather than chase subscriber market share in what has historically been a pretty entrenched marketplace, Verizon has instead focused on average monthly subscriber revenue lately in a bid to squeeze a bit more cash from the same people rather than engage in costly acquisition of new leads from its competitors.
This is the kind of long-term approach that income investors find appealing. Growth-oriented companies often bleed cash as they chase market share, but there are worse ideas than simply harvesting from an existing and loyal customer base to support generous dividend payments. Indeed, Verizon has just upped the ante on its payout twice within a year’s time. In September 2025, it announced a 2% increase to 69¢ per share; then in February of this year, it announced another 2%-plus bump to 70.75¢ per share, which would be good for its 20th consecutive year of dividend growth.
That dedication to dividend growth should help VZ remain among the best dividend stocks for beginners for some time.
Related: The 10 Best ETFs for Beginners
3 Bonus Monthly Payers

The cycle of paying dividends is always different depending on the company. While it’s generally true that most U.S. corporations opt to pay their shareholders a dividend once per quarter, the dates aren’t fixed. Specifically, one company might pay you on a January-April-July-October payment cycle while another opts for February-May-August-November.
Complicating things further, some companies pay dividends twice a year, some pay once a year, and some even pay “special” unscheduled dividends.
But now, we’re going to take a look at three stocks that stand out from the pack not just because of their above-average dividend yields, but also their above-average dividend frequency.
The following three stocks pay us each and every month. (But you can check out this story to get the full list:10 Best Monthly Dividend Stocks for Regular, Frequent Income.)
3. Agree Realty
- Industry: Commercial real estate
- Market capitalization: $9.2 billion
- Dividend yield: 4.2%
Agree Realty (ADC) is a commercial real estate operator that deals in a wide array of retail tenants. Grocery stores are the largest part of the annualized base rent mix, but at just 10%. Assets are spread out across numerous categories, including home improvement stores, convenience stores, tire and auto centers, pharmacies, even farm and rural supply stores.
Agree currently boasts more than 2,750 properties, representing 57.5 million square feet, across all 50 states. And it leases those properties out on a “net lease” basis. This means ADC’s leases are “net” of insurance, maintenance, and taxes. So whereas “normal” REITs would be responsible for all three items, in a net-lease situation, tenants such as Walmart (WMT), Tractor Supply (TSCO), Dollar General (DG), and Best Buy (BBY) take care of those costs separately. Agree Realty simply collects a rent check.
Related: The 13 Best Mutual Funds You Can Buy Right Now
This system results in much more stable, more predictable income for REITs—exactly what you want when you’re relying on a stock for income.
Sure, real estate broadly has been a minefield over the past decade, given the pain that e-commerce has caused traditional brick-and-mortar retailers. But not all retailers are built equally—many discretionary retailers operating malls might have been pelted, but many of the staples-goods retailers on Agree’s tenant list are doing just fine and paying steadily climbing rents. And those are the types of tenants Agree has built its business around.
Agree Realty’s dividend program isn’t new, but it is a relative newbie among monthly dividend stocks—ADC started making more frequent payouts in 2021. Also, Agree has been improving the dividend on a semiannual basis since 2016.
Related: 8 Best Vanguard Retirement Funds for a 401(k)
2. EPR Properties

- Industry: Experiential real estate
- Market capitalization: $4.5 billion
- Dividend yield: 6.2%
EPR Properties (EPR) might be responsible for one of your favorite places, and you just don’t know it yet.
Once known as Entertainment Properties Trust, EPR Properties is an “experiential” real estate firm whose locations are dedicated to helping you learn, stretch out, and play. This is a 335-property portfolio, leased out to 59 tenants in 42 states and Canada, that includes movie theaters, water parks, ski resorts, Andretti Karting & Games go-karting, TopGolf gamified driving ranges, golf courses, fitness studios, private schools, early childhood education centers, and more.
EPR is also growing its amusement-park roster.
Related: The 9 Best Dividend Stocks for Beginners
“In early April, EPR completed the acquisition of six attraction properties as part of its previously announced Six Flags portfolio acquisition comprised of seven attraction properties ($315 million total portfolio investment at an 8.0% cash cap rate). The remaining property is expected to close in [the second quarter],” say Stifel analysts, who rate EPR’s stock at Buy. “This progress marks a significant shift in pace and activity for the company as it’s now more on the offensive than we have seen in recent years.”
JPMorgan analysts, who rate the stock at Overweight (equivalent of Buy) lay out the strength of its most recent earnings: “On the tenant health side, it noted that its Eat & Play portfolio is performing in line with last year, Ski is seeing some gains due to geographic diversification, Education coverage remains strong, Fitness & Wellness is delivering solid performance, and theaters are seeing increased attendance.”
EPR has been paying and raising its monthly dividend for years. Most recently, in February, it announced a 5% bump higher to 31¢ per share, putting this monthly dividend stock at a yield north of 6%.
Featured Financial Products
1. Gladstone Investment Corp.
- Industry: BDC
- Market capitalization: $608.9 million
- Dividend yield: 9.8%
Business development companies (BDCs) are specialized firms that provide capital for small- and midsized businesses. It’s a small niche in the public markets—only a few dozen trade on U.S. exchanges—but it’s also one of the highest-yield corners of Wall Street. That’s because, like REITs, they must distribute at least 90% of their income in the form of dividends in exchange for exemption from corporate income tax.
Gladstone Investment Corp. (GAIN) is a BDC that specializes in acquiring mature, lower-middle-market companies. It’s a bit narrow for a BDC, at just 29 companies, though those companies are spread across 20 states and Canada, and they represent 16 different industries. Its target companies generate between $4 million and $15 million in annual EBITDA, and boast strong management teams as well as attractive financial and operational fundamentals.
Related: 8 Low- and Minimum-Volatility ETFs for Peace of Mind
Gladstone provides most if not all the equity and debt capital required to close transactions—a higher-risk but higher-return strategy than many other BDCs. Still, it boasts an impressive dividend history, paying out 249 consecutive monthly distributions to its shareholders. Dividend growth isn’t grand, but it’s decent enough—the payout has doubled between 2011 and 2026.
But investors should know that the yield isn’t quite what it seems. Gladstone pays a regular monthly dividend of 8¢ per year, then typically shells out a supplemental dividend once each year from the realized capital gains generated by equity stakes in successful exits. When that dividend gets paid, and how much it is, varies from year to year. In 2025, GAIN paid out 54¢ in June. The year before it was 54¢ in October.
Based on the regular dividend and last year’s supplemental, GAIN yields 9.8%. But the regular by itself yields 6.2%.
What If I Need Help Picking Stocks?

Motley Fool Stock Advisor is a stock picking service that espouses my favorite, plain-vanilla trading style: buy-and-hold. Fool analysts provide recommendations for both “Steady Eddies” and potential high-flying stocks with sound fundamentals—exactly the combination of holdings you want to generate strong performance without risking extremely high volatility.
Importantly, Stock Advisor doesn’t just give you a list of tickers and call it a day. It also provides investment rationales and research for each pick to help educate you before you buy.
Stock Advisor has returned more than 900% since its founding in February 2002, more than tripling the S&P 500 over that time (as of 6/11/26). You can join this service at a discounted rate for the first year, and get a 30-day membership-fee-back period, if you sign up for Stock Advisor today.
- Motley Fool Stock Advisor is a stock service that provides recommendations for both "steady Eddie" and high-flying stocks, as well as a few ETFs for investors who want diversified holdings, too.
- Just getting started? Stock Advisor provides 10 "Foundational Stocks" you can use to anchor your portfolio.
- You're not alone! Stock Advisor membership also gives you access to a community of investors who also want to outperform the market and love talking shop.
- Enjoy access to GamePlan: Motley Fool's financial planning hub, which includes advice on personal finances, taxes, retirement, and more, as well as calculators and other financial tools.
- Limited-Time Offer: Get your first year with Stock Advisor for $99 (vs. $199 usual value)—a 50% discount for new members!—by clicking our link.*
- Discounted introductory price
- Strong outperformance compared to the S&P 500
- High overall average return for stock picks
- High renewal price
- Not every stock is a winner
Do All Companies Pay Dividends?
Not all companies pay dividends. Some companies choose not to, while other companies cannot afford to.
As you can tell by this list, the best dividend stocks are normally slow-and-steady companies that have consistent operations. While it might be possible for a small software company or biotech firm to double its share price overnight, these companies rarely pay dividends because they don’t have much in the way of profits—and what they do have, they want to spend on other things, like research and development to continue growing.
Like Young and the Invested’s content? Be sure to follow us.
What Should Income Investors Look for in a Dividend Stock?
There are a host of things to consider when looking for the best dividend stocks.
First, and foremost, you should make sure you understand the underlying business and its strategy; just because a company pays a dividend doesn’t mean it can’t crash and burn.
If you generally like what you see, then you should consider the quality of the dividends including the history of payouts and the payout ratio as a portion of total earnings.
Then, you should consider the quantity of that dividend and the potential for future growth in payouts.
Related: Best Fidelity Retirement Funds for a 401(k) Plan
Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.
Related: 15 Stocks You Can Buy and Hold Forever
As even novice investors probably know, funds—whether they’re mutual funds or exchange-traded funds (ETFs)—are the simplest and easiest ways to invest in the stock market. But the best long-term stocks also offer many investors a way to stay “invested” intellectually—by following companies they believe in. They also provide investors with the potential for outperformance.
So if you’re looking for a starting point for your own portfolio, look no further. Check out our list of the best long-term stocks for buy-and-hold investors.
Related: 7 Best Vanguard Dividend Funds [Low-Cost Income]
What’s better than a smart, sound dividend income strategy? How about a smart, sound dividend income strategy with very little money coming out of your pocket?
If that sounds good to you, you need look no farther than low-cost pioneer Vanguard, which offers up a number of payout-oriented products. Find out what you need to know in our list of seven top-notch Vanguard dividend funds.
Please Heart ❤️, Follow and Subscribe
Did you find this article helpful?
1. Click the Heart Button.
2. Follow WealthUpdate —-> https://flipboard.com/@WealthUpdate
3. Subscribe to Retire With Riley, our free weekly retirement planning newsletter.




