What do the market's best dividend stocks look like?
Annoying an answer as this is, it depends on what you're looking for. Maybe you want prolific dividend growth, for instance. Or maybe you're looking for high current yield.
But today, I want to focus on so-called "total package" dividend stocks: top-quality companies that pay well-covered dividends that amount to above-average yields. In some cases, these companies have been growing their distributions, and a few deliver truly high yields. However, the main point across the board here is these companies' overall quality.
Read on as I highlight Wall Street's best dividend stocks, as rated by research firms that routinely cover these companies. I'll also take some time to explain the importance of dividend income and sustainable payouts.
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.
How I Chose the Best Dividend Stocks to Buy
Before I started this article, I was video calling a colleague and joked, in a pseudo-philosophical voice, "What is a good dividend stock, anyways?"
But I was only partly kidding. What's ideal to one investor might not fit the bill for another. Ultimately, though, I coalesced around safe dividends, with some capacity to grow, sporting above-average yields, paid by larger (and thus likelier to be more stable) companies. Specifically, they have to …
- Be in the S&P 500.
- Have a yield greater than 1.5%, to ensure they're better than the overall market. Most of the stocks on this list yield more than 2%. (If that's too low a baseline yield for you, I suggest you instead read our list of high-yield dividend stocks, where 5%-plus yields are the norm.)
- Have an earnings payout ratio below 70%. This is a generally safe level where there's still at least some room for dividend growth, and the lower the payout ratio, typically the more growth potential there is. (Note: Free cash flow payout ratio is an even better metric, but screening data for this tends to be unreliable.)
- Have at least a consensus Buy rating according to analysts tracked by S&P Global Market Intelligence. S&P boils down consensus ratings down to a numerical system where anything less than 1.5 is a Strong Buy, 1.5 to 2.5 is a Buy, between 2.5 and 3.5 is a Hold, 3.5 to 4.5 is a Sell, and anything greater than 4.5 is a Strong Sell. In this case, I only included stocks with a 2.0 rating or less—so at least a pretty firm consensus Buy rating, if not an outright Strong Buy.
Let's look at three of the companies I selected from my broader list of the best-rated dividend stocks to buy. Equities here are listed in reverse order of their consensus analyst rating, starting with the worst-rated stock and ending with the best-rated stock.
Related: 7 Best High-Yield Dividend ETFs for Income-Hungry Investors
UnitedHealth Group
- Sector: Healthcare
- Market cap: $344.3 billion
- Dividend yield: 2.5%
- Consensus analyst rating: 1.58 (Buy)
UnitedHealth Group (UNH) is America's largest health insurer, though its massive healthcare operations go far beyond typical coverage. In addition to its UnitedHealthcare insurance division, UNH also is the parent of Optum, which provides medical-care coordination, pharmaceutical services, and health data and analytics.
Indeed, while UnitedHealth is the better-known brand, Optum's businesses actually contribute more to the bottom line.
UNH shares trudged through a lousy first few months of the year as the company was dogged by a number of issues, including the possibility of funding cuts for Medicaid, rising medical costs, and a Wall Street Journal article claiming that the U.S. Department of Justice was investigating UnitedHealth's Medicare billing practices. But it has since staged an energetic bounce-back that has it outperforming both the S&P 500 and healthcare sectors for the year to date.
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It's also coming off strong second-quarter results that easily beat Street estimates, thanks in large part to Medicare Advantage.
"We believe UNH is well positioned by virtue of its diversification, strong track record, elite management team, and exposure to certain higher growth businesses," say Oppenheimer analysts (Outperform), who upgraded their earnings estimates for 2026-28 following the report. "The company's Optum business is a nice complement to its core managed care operations and continues to account for a large share of earnings. Furthermore, UNH's vertical integration strategy strengthens the company's competitive positioning across many areas of the healthcare landscape."
UnitedHealth has a robust bull camp of 22 Buys, against four Holds and no Sells, to put it among the best-rated dividend stocks on Wall Street.
As for the dividend, UNH raised its payout by 5% in June, to $2.32 per share, which comes out to about half of this year's projected profits. That's a higher ratio than in recent years, but it still gives UnitedHealth some room to modestly improve the dividend going forward.
Related: The 7 Best REITs to Buy for the Rest of 2026
Bank of America
- Sector: Financials
- Market cap: $415.9 billion
- Dividend yield: 2.0%
- Consensus analyst rating: 1.54 (Buy)
Bank of America (BAC) is one of the world’s largest banks, serving roughly 70 million Americans through 3,800 branches and 15,000 ATMs across 39 states. However, BofA 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. Its offerings range from checking and savings accounts to commercial loans, trade finance, treasury management, and securities clearing.
BAC shares had spent most of the year in the red, but they rebounded during the summer to flip to single-digit gains. Relatively volatile markets have helped push trading revenues higher, loans are growing, and the company's net interest margin (NIM) picture is improving.
Related: 15 Best Long-Term Stocks to Buy and Hold Forever
"Management continues to focus on what it terms 'responsible growth.' We believe this may be seen in the company’s ability to expand its loan portfolio without taking on excessive credit risk, and to balance growth across segments so that more volatile businesses, such as trading and investment banking, do not account for an outsized portion of profits," says Argus Research analyst Stephen Biggar (Buy). "We believe that the current BAC share price undervalues the franchise given ongoing improvement in return metrics and continued positive operating leverage."
More recently, BAC is coming off a solid second-quarter earnings release in which the company reported stronger fee income and muted expenses. "The second-quarter print reaffirms our prior view that BAC's NIM remains among the more defensible in the group, supported by fixed-rate asset repricing tailwinds and strong deposit franchise, evidenced by a 1-basis-point decline in total deposit costs," says Citi analyst Benjamin Gerlinger (Buy).
Analysts are plenty bullish on this Big Four bank, offering up 20 Buy ratings against just four Holds and no Sells. Bank of America has raised its cash distribution by 55% between 2020 and today. Most recently, it announced a stellar 14% hike, to 32¢ per share, effective as of the September 2026 payout. That dividend is very well-covered at less than 30% of 2026’s expected earnings.
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Targa Resources
- Sector: Energy
- Market cap: $61.6 billion
- Dividend yield: 1.7%
- Consensus analyst rating: 1.45 (Strong Buy)
Targa Resources (TRGP) deals in the midstream energy market segment—alongside its subsidiary, Targa Resource Partners LP, it owns a wide array of gathering, processing, logistics, and transportation assets across numerous natural resource plays, including the Permian Basin, Bakken Shale, Anadarko Basin, and the Gulf of Mexico, among others. The Permian Basin is arguably Targa's biggest growth driver; roughly 3 in 5 lower-48 U.S. shale rigs are located there, and about 80% of Targa's natural gas inlet volumes are sourced from there.
Targa went public in 2010, peaked in 2014, cratered, then largely hovered for a few years after that. But after bottoming out during COVID, the stock has roared back to life and nearly doubled in 2024 to hit all-time highs. After flatlining in 2025, shares have exploded upward by more than 50% in 2026, and the analyst community remains wildly bullish: Twenty Buys dwarf just two Hold calls and no Sells, making TRGP one of the market's best dividend stocks to buy right now.
Related: 10 Best Dividend Mutual Funds You Can Buy Now
Much of this can be attributed to Targa's positioning in the Permian.
"Targa maintains peer-leading earnings growth as one of the central infrastructure companies in the Permian and is simultaneously buoyed by an accelerating capital return profile, which we believe is likely to help sustain share momentum," say Stifel analysts (Buy), who resumed coverage of the stock in September. "Targa is fully integrated across the [natural gas liquids] supply chain and is increasing natural gas exposure with a dominant Permian G&P position that in aggregate supports ~11% adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization] growth through 2030, underpinned by over 90% fee-based earnings."
Energy infrastructure stocks are a different breed. Many of them are master limited partnerships (MLPs), which are required to return a majority of their income to unitholders (shares in MLPs) in the form of distributions (dividend-like payments to shareholders that have different tax consequences). Targa is technically a corporation, though, so it pays dividends like a traditional stock.
In April, the company announced a 25% increase to its dividend, to $1.25 per share. That comes out to 45% of 2026 earnings projections.
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