15 Best DRIP Stocks to Own Right Now

Core Insights - The article discusses the benefits of Dividend Reinvestment Plans (DRIPs) for investors, emphasizing the power of compounding returns through reinvested dividends [1][2]. DRIP Stocks Overview - The article identifies several top DRIP stocks, highlighting their potential for portfolio growth through consistent dividend reinvestment [5]. Historical Performance of Dividends - Research indicates that dividends have significantly contributed to investment returns, with approximately 85% of the S&P 500's total cumulative return since 1960 attributed to reinvested dividends and compounding effects [3]. - A report from S&P Dow Jones Indices shows that dividends historically account for about 31% of the S&P 500's total return, with periods in the 1940s and 1970s seeing dividends contribute over half of total returns [4]. Methodology for Stock Selection - The selection of DRIP stocks was based on a consensus approach, focusing on companies with strong and consistent dividend histories, ranked by the number of hedge funds holding stakes as of Q2 2025 [7]. Realty Income Corporation (NYSE:O) - Realty Income Corporation is highlighted as a top DRIP stock, with 27 hedge fund holders. The company reported Q3 revenue of $1.47 billion, up from $1.33 billion year-over-year, and raised its full-year 2025 AFFO per share outlook to between $4.25 and $4.27 [10][12]. - The company is recognized as one of the largest REITs globally, with a diversified portfolio and a steady stream of rental income [13]. Hormel Foods Corporation (NYSE:HRL) - Hormel Foods Corporation is also noted as a leading DRIP stock, with 38 hedge fund holders. The company revised its 2025 EPS outlook down by 8 to 9 cents due to various operational challenges [14][15]. - Hormel announced a restructuring plan that includes cutting approximately 250 positions, with costs projected to exceed $20 million [17][18]. Illinois Tool Works Inc. (NYSE:ITW) - Illinois Tool Works Inc. is mentioned as a strong DRIP stock, with 44 hedge fund holders. The company reported Q3 revenue of $4.1 billion, reflecting a 2% year-over-year increase, and declared a consistent quarterly dividend of $1.61 per share [19][20]. - The company has a notable history of 53 consecutive years of dividend increases, reinforcing its status as a Dividend King [20].