December’s Top High-Dividend Stocks (and How to Start Investing for Dividends)

When the stock market is rocky, investors may want to consider stable investments that offer a regular stream of income. Dividend stocks often provide both.

What are dividend stocks?

Dividend stocks are shares of companies that regularly pay investors a portion of the company's revenue. Some dividend stocks pay out annually, semi-annually or quarterly, while others are monthly dividend stocks. This provides a regular stream of passive income to investors. Here's more about dividends and how they work.

The best dividend stocks are from well-established companies and increase their payouts over time. But a high dividend yield can indicate many things, and not all of them are good. A falling stock price can actually increase dividend yields. Sometimes, companies overspend to pay high dividends and end up going into debt. The companies that overspend may eventually have to cut their dividends if they become unsustainable.

Your personal investment needs will likely determine which dividend stocks are right for you. For example, if you own lots of energy stocks, and you want to add some dividend-paying stocks, you may want to ensure that you're not adding even more energy stocks to your portfolio. The ideal portfolio varies from person to person, based on individual goals and timelines.

If you're looking for dividend stocks that likely won't cut their dividends, you might want to check out the dividend aristocrats. This is a group stocks listed on the S&P 500 that have increased their dividends every year for at least 25 years.

Top 5 high-dividend stocks

1. Upbound Group Inc (UPBD)

Leading this dividend screen is Upbound Group Inc (UPBD), with a current dividend yield of 8.65% and forward P/E of 3.75. Its payout ratio is 67.95% and when we pulled the data, the stock price was $18.03.

2. Altria Group Inc (MO)

• Forward P/E: 10.65

• Dividend Yield: 6.98%

• Payout Ratio: 61.16%

• Price: $59.51

3. Verizon Communications Inc (VZ)

• Forward P/E: 8.59

• Dividend Yield: 6.63%

• Payout Ratio: 64.77%

• Price: $41.28

4. Amerisafe Inc (AMSF)

• Forward P/E: 17.47

• Dividend Yield: 6.55%

• Payout Ratio: 51.15%

• Price: $39.07

5. United Parcel Service, Inc (UPS)

• Forward P/E: 13.98

• Dividend Yield: 6.53%

• Payout Ratio: 96.41%

• Price: $100.24

Source: Finviz. Stock data is current as of Dec. 15, 2025 and is intended for informational purposes only.

Dividend stocks vs. dividend funds

There are two main ways to invest in dividend stocks: Through funds — such as index funds or exchange-traded funds — that hold dividend stocks, or by purchasing individual dividend stocks.

Dividend funds offer investors access to a selection of dividend stocks within a single investment. That means with just one transaction, you can own a portfolio of dividend stocks. The fund will then pay you dividends on a regular basis, which you can take as income or reinvest. Dividend funds offer the benefit of instant diversification — if one stock held by the fund cuts or suspends its dividend, you can still rely on income from the others.

In general, a good rule of thumb is to invest the bulk of your portfolio in index funds or ETFs, for the above reasons. But investing in individual dividend stocks with a small portion of your portfolio can be beneficial.

Although it requires more work on the part of the investor — in the form of research into each stock to ensure it fits into your overall portfolio — investors who choose individual dividend stocks are able to build a custom portfolio that may offer a higher yield than a dividend fund. Expenses can also be lower with dividend stocks, since ETFs and index funds charge an annual expense ratio.

» Learn more about dividend ETFs

How to invest in dividend stocks

Building a portfolio of individual dividend stocks takes time and effort, but for many investors it's worth it. Here’s how to buy a dividend stock:

1. Open a brokerage account if you don't have one

If you want to invest in dividend stocks, you'll need to have a brokerage account to do so. Brokerage accounts are free to open (though you'll have to deposit enough money to buy the stocks). It typically takes about 15 minutes to set up a brokerage account, and the process is very similar to opening a bank account. Once your account is open, you can fund it by transferring money from a bank account or another brokerage account. You can also purchase dividend stocks within a retirement account like an IRA — and in some cases, it may be advantageous from a tax perspective to do so.

» Check out our roundup of the best online brokerages for dividend investing

That's because dividends in taxable brokerage accounts cause taxes to be realized in the year the dividends are paid out, even if you reinvest them. This is unlike stocks that do not pay dividends; in those cases, taxation primarily occurs when the stock is sold. In tax-advantaged accounts like IRAs, taxes on investment income are deferred or sidestepped completely. But for investors with taxable accounts, especially those in high income tax brackets, dividend stocks might not be as tax efficient as other options. If you're not sure, it may make sense to consult a financial or tax advisor.

» Learn how dividends are taxed

2. Research your options

You may already have a stock in mind, such as one of the aforementioned dividend aristocrats. But if you don't, you can look for stocks that pay dividends on your online broker's website. You can also check out free stock screeners.

To look under the hood of a dividend stock, start by comparing the dividend yields of its peers. If a company’s dividend yield is much higher than that of similar companies, it could be a red flag. At the very least, it’s worth additional research into the company and the safety of the dividend. A too-high dividend yield can indicate the payout is unsustainable. It can also indicate that investors are selling the stock, driving down its share price and increasing the dividend yield as a result.

Then look at the stock’s payout ratio, which tells you how much of the company’s income is going toward dividends. A payout ratio that is too high — generally above 80%, though it can vary by industry — means the company is putting a large percentage of its income into paying dividends. In some cases dividend payout ratios can top 100%, meaning the company may be going into debt to pay out dividends.

» Estimate your dividend stock returns with our dividend calculator.

3. Decide how many shares you want to buy

This might be an easy answer based on how much money you have to invest. But if you have a larger pot of money to divvy up, you’ll need to determine what portion of your portfolio goes into each stock. For example, if you’re buying 5 stocks, you could put 20% of your portfolio in each. However, if the stock is riskier, you might want to buy less of it and put more of your money toward safer choices. For help, work with a financial advisor or use an asset allocation calculator, which is often available through your brokerage account.

Once you've selected your stocks and placed trades to buy them, you can elect to reinvest the dividends instead of taking them as cash. This can be a good way to boost your portfolio's overall investment return, especially if you don't need the income from the dividend stocks in your portfolio.

Dividends typically increase the return of a stock or dividend fund by a few percentage points. For example, the historical total annual return (which includes dividends) of the S&P 500 has been, on average, about two percentage points higher than the index's annual change in value.

And that difference can really add up: A $5,000 investment that grows at 6% annually for 20 years could become over $16,000. Bump that return up to 8% annually to include dividends, and that $5,000 could grow to over $24,000.

4. Check the ex-dividend date.

Many companies pay dividends quarterly, some only pay them annually or semi-annually, while a few others are monthly dividend stocks.

But you generally won’t receive a dividend if you only buy the stock on the date it’s paid out. To receive a dividend payment, you must own the stock before the ex-dividend date, which is usually weeks before the payment date.

For example, here are two stocks with upcoming ex-dividend dates:

Salesforce Inc. (CRM)

• Ex-dividend date: Dec. 18, 2025

• Payment date: Jan. 8, 2026

• Amount per share: $0.416

Broadcom Inc. (AVGO)

• Ex-dividend date: Dec. 22, 2025

• Payment date: Dec. 31, 2025

• Amount per share: $0.65