What are the best dividend stocks right now for investors?
We asked Seeking Alpha analysts Will Barton of HDO, Kody’s Dividends, Long Player, and Austin Rogers for their picks.
Will Barton of HDO: We are entering a period of change for the economy, and that means a period of increased risk for many companies. When macroeconomic headwinds pick up and interest rates are likely to head down, I turn to agency mortgage-backed securities, or MBS. Mortgage REITs that focus on agency MBS like AGNC Investment (NASDAQ:AGNC) or Annaly Capital (NYSE:NLY).
Agency MBS is countercyclical, meaning it usually outperforms when the economy is weak. AGNC and NLY are the two largest mortgage REITs that specialize in this sector. They are producing very high dividends today, while the resumption of the Fed’s cutting cycle will provide tailwinds for asset values and cash flow going forward. We expect rising book values and rising cash flow as investors seek assets with low credit risk, like agency MBS.
Kody’s Dividends: I believe that midstream offers some of the most attractive dividend/distribution stocks right now. At a macro level, midstream companies are an indirect way to cash in on the ongoing AI revolution/data center boom. Goldman Sachs recently forecasted that U.S. data center electricity consumption will jump by 165%, from 4% of total electricity consumption in 2023 to 10% by 2030. This would represent an increase from under 200 terawatt hours in 2023 to around 500 TWh by 2030.
As tollbooth operators, these companies are positioning themselves as an increasingly preferred energy source for data centers (natural gas lead times are generally the fastest option for data centers, and economical). In recent months, Energy Transfer (NYSE:ET) signed a first-of-its-kind deal with a hyperscaler in Texas. Two more deals soon followed, and Co-CEO Marshall McCrea noted on the Q2 2025 earnings call that the company was close to two more.
ET (NYSE:ET) also pays a well-covered 8% distribution yield (1.9x coverage ratio through H1 2025) and boasts an investment-grade balance sheet (BBB S&P credit rating on a stable outlook). Combine that with its steep undervaluation (trading 26% below my latest fair value estimate), and ET is a top pick for me, as are fellow MLP Enterprise Products Partners (NYSE:EPD) and C-Corp ONEOK (OKE).
Long Player: The most attractive distribution stocks currently both issue K-1’s, Enterprise Products Partners (NYSE:EPD) and Western Midstream Partners (NYSE:WES). Both have long-term contracts and are midstream players. Midstream is known as the utility part of the industry because of its relatively low risks compared to upstream.
After that, the risk climbs considerably among smaller players Meren Energy (OTCPK:AOIFF), Vaalco (EGY) and Parex Resources (OTCPK:PARXF). With companies like these three, I would consider making them part of a basket of stocks due to their fairly high individual risks.
The royalty company Viper Energy Partners (VNOM) can be considered as a variable distribution entity. It grows fairly rapidly, and the stock price is down somewhat due to the outlook for commodity prices. The story would be similar here for Permian Resources (PR). In both cases, the recovery potential may outweigh any income considerations, but both have rapidly growing distributions.
Austin Rogers: With artificial intelligence capturing all the headlines and hype, many high-quality dividend payers outside the AI ecosystem have been totally overlooked. Defensive sectors like real estate (XLRE), healthcare (XLV), and consumer staples (XLP) have been among the worst performing this year and are rich with attractive buying opportunities. Meanwhile, some “high dividend” ETFs, such as Vanguard High Dividend Yield Index Fund ETF (VYM) and iShares Core High Dividend ETF (HDV), currently sport close to their lowest yields in a decade.
In my view, the real estate sector, valued at a 16x earnings multiple, offers a wide swathe of bargains relative to the broader market’s ~23x multiple. Low home buying affordability makes American Homes 4 Rent (AMH) an attractive option, while the defensiveness and stability of wireless infrastructure make American Tower (NYSE:AMT) appealing. Finally, little new supply of retail space makes the low-leveraged, Sunbelt-focused, grocery-anchored shopping center landlord InvenTrust Properties (IVT) a sleep-well-at-night pick.