Core Insights - The article discusses the rise of side hustles and highlights the best dividend stocks for passive income, indicating a growing trend among individuals seeking additional income sources [1][2][3]. Side Hustle Trends - Over 36% of Americans engage in side gigs, earning an average of $530 per month, with Gen Z leading this trend [2] - The global side hustle market was valued at $556.7 billion in 2024, and in March 2025, the US saw a 6.4% increase in new business applications [2] - 55% of full-time workers are interested in turning hobbies into businesses, reflecting a shift towards formal entrepreneurial ventures [2] Dividend Stocks as Passive Income - Dividend stocks provide a reliable source of passive income, appealing to retirees and those seeking stable earnings during market fluctuations [3] - Investors often reinvest dividends to purchase additional shares, potentially increasing both dividend income and overall investment value over time [4] Methodology for Stock Selection - The article utilized Insider Monkey's database of nearly 1,000 hedge funds as of Q2 2025 to identify stocks with strong dividend policies, sound financials, and a history of dividend growth, focusing on those with a minimum yield of 4% as of September 22 [6] Hedge Fund Interest - The article emphasizes the importance of stocks favored by hedge funds, noting that imitating top hedge fund picks can lead to market outperformance [7] Company Highlights - **Arbor Realty Trust, Inc. (NYSE:ABR)**: A real estate investment trust with a dual strategy in structured and agency loan origination, offering a quarterly dividend of $0.30 per share and a yield of 10.26% as of September 22 [8][10] - **Universal Corporation (NYSE:UVV)**: A global agricultural company recognized as a Dividend King, with a history of 55 consecutive years of dividend increases, paying a quarterly dividend of $0.82 per share and a yield of 5.99% as of September 22 [11][13] - **Guess?, Inc. (NYSE:GES)**: An international apparel company that has paid dividends for 18 consecutive years, recently increasing its quarterly dividend by 25% to $0.225 per share, with a yield of 5.35% as of September 22 [14][16]

Core Insights - Dividends are a reliable source of income for shareholders, with healthy and growing dividend-paying stocks typically maintaining regular payouts regardless of economic conditions [1] - A decline in stock prices can lead to higher dividend yields, as the yield is calculated by dividing the total annual payout by the current share price [2] Company Summaries - **United Parcel Service (UPS)**: - The stock has decreased by approximately 33% year to date, currently yielding 7.8%, which translates to an expected annual income of about $390 for a $5,000 investment [4] - The decline is attributed to economic uncertainties, reduced online shopping, and a strategic reduction in business with Amazon [4][5] - The forward-looking price-to-earnings (P/E) ratio is 11.3, significantly below its five-year average of 15.8, indicating potential value [5] - **Target**: - Target has reported net sales of $107 billion in 2024 and operates 1,989 stores in the U.S., employing over 400,000 people [8] - The stock has fallen about 35% year to date, influenced by the abandonment of its diversity, equity, and inclusion (DEI) policy and ongoing supply chain issues [9]

Group 1: Market Overview - The stock market has performed well, with the S&P 500 rising by 14% year to date as of September 22, hitting new highs [1] - Despite the overall market performance, many high-yielding dividend stocks have struggled [1] Group 2: Investment Opportunities - Three potentially undervalued stocks for income investors are United Parcel Service (UPS), Kimberly-Clark, and Comcast, all trading near their 52-week lows and offering dividends over 4% [2][8] Group 3: United Parcel Service (UPS) - UPS offers a high dividend yield of 7.8%, significantly above the S&P 500 average of 1.2%, but its stock has declined over 30% this year due to concerns over economic conditions [4] - For the first half of the year, UPS reported revenue of $42.8 billion, a slight decrease of less than 2% from $43.5 billion in the same period last year [5] - UPS's diluted earnings per share (EPS) was $2.91, averaging $1.46 per quarter, while the quarterly dividend payout is $1.64, indicating a potential risk of dividend cuts as free cash flow of $3.5 billion is below the $5.4 billion paid in dividends [6][7] - The stock trades at a price-to-earnings (P/E) multiple of less than 13, suggesting it may be a bargain buy in the long run, but short-term challenges are anticipated [7] Group 4: Kimberly-Clark - Kimberly-Clark is recognized as a Dividend King, having raised its dividend for 53 consecutive years, with a recent increase of a little over 3%, resulting in a current yield of approximately 4.1% [8]

Core Viewpoint - Dividend stocks provide high yields and growth catalysts that can support payouts for decades, making them attractive for passive income investors [1][2]. Group 1: Dividend Stocks Overview - Building passive income through dividend-paying stocks allows investors to secure financial freedom by generating regular cash distributions [2]. - Dividend stocks combine income with potential long-term capital appreciation, offering protection against inflation through rising distributions [3]. Group 2: Company-Specific Insights - Philip Morris International offers a 3.6% yield with an 80% payout ratio, supported by its transformation towards smoke-free products, which generated 39% of 2024 revenue [6][7]. - Pfizer provides a 7.14% yield at 7.7 times forward earnings, with projected revenue of $61 billion to $64 billion in 2025, driven by various growth products and an acquisition of Metsera for up to $7.3 billion [8][9]. Group 3: Investment Considerations - Philip Morris trades at a discount with a forward earnings ratio of 19.4 compared to 22 for the S&P 500, while maintaining a credible path to smoke-free growth [7]. - Pfizer's high payout ratio of 90% presents execution risks, but management's commitment to dividends and lower expense guidance suggest a compelling risk-reward balance [9][11]. Group 4: Passive Income Strategy - Both Philip Morris and Pfizer offer different paths to passive income, with a combined yield of approximately 5.4%, significantly higher than the S&P 500 average [10]. - Sustainable yields backed by strong business fundamentals are crucial for passive income investing, with both companies demonstrating potential despite facing regulatory challenges [11].

Group 1 - Lowe's Companies, Inc. is recognized as one of the 12 Best Retail Dividend Stocks to buy now, highlighting its strong position in the retail market [1] - The company has a long history of over a hundred years and is currently the second-largest home improvement retailer in the US, operating more than 1,700 stores [2] - Despite challenges in the housing market, Lowe's is well-positioned as homeowners tend to invest in renovations when buying new homes becomes difficult, supporting long-term growth [3] Group 2 - The aging US housing stock, with most homes between 31 and 60 years old, contributes to steady demand for home improvement products and services [4] - Lowe's focus on professional contractors is a growing sales segment that enhances its market outlook [4] - The company is a Dividend King, having increased its dividend payouts for 60 consecutive years, currently offering a quarterly dividend of $1.20 per share with a yield of 1.84% as of September 22 [5]

Core Insights - The Kroger Co. is recognized as one of the 12 Best Retail Dividend Stocks to Buy Now, highlighting its appeal to income investors [1] - The company is a major player in the food retail industry, operating over 2,700 stores and providing essential grocery services, which contributes to its stability [2][3] Company Overview - The Kroger Co. operates under various banners including Fred Meyer, Ralphs, King Soopers, Harris Teeter, and its flagship Kroger brand, along with over 2,000 in-store pharmacies and around 1,500 fuel centers [3] - The company has a strong track record of consistent earnings and shareholder rewards, making it a vital part of the communities it serves [2] Dividend Information - Kroger has a 19-year history of consistent dividend growth, making it one of the best dividend stocks in the retail sector [4] - The company currently pays a quarterly dividend of $0.35 per share, resulting in a dividend yield of 2.17% as of September 22 [4]

Core Insights - Ross Stores, Inc. (NASDAQ:ROST) is recognized as one of the 12 best retail dividend stocks to buy now, highlighting its strong position in the retail market [1] Company Overview - Ross Stores operates a large off-price retail network in the US, offering a variety of products including clothing, home goods, shoes, and accessories at lower prices compared to traditional retailers. Its main chains, Ross Dress for Less and dd's DISCOUNTS, cater to budget-conscious consumers seeking brand-name items at discounted prices [2] Business Strategy - The company focuses on five main priorities: off-price buying, expanding its store base, improving supply chain efficiency, strengthening marketing, and managing its workforce. Its strategy emphasizes sourcing merchandise on favorable terms, maintaining fast inventory turnover, and opening new stores. Long-term success is contingent on adapting to changing consumer preferences, securing strong supply agreements, and controlling expenses in distribution and real estate [3] Dividend Performance - Ross Stores has a strong dividend history, having raised its payouts for four consecutive years, making it one of the top dividend stocks in the retail sector. The company currently pays a quarterly dividend of $0.405 per share, resulting in a dividend yield of 1.12% as of September 22 [4]

Group 1 - Gen Z has the potential to benefit from long-term investments, as they have more time to navigate market uncertainties [1][2] - Individual risk tolerance is crucial for Gen Z when considering investment options [2] - Index funds, such as the Vanguard S&P 500 ETF (VOO), are recommended for Gen Z investors seeking lower-risk exposure to the stock market [3][4] Group 2 - Artificial intelligence (AI) is expected to be a significant technological advancement in the coming decade, with companies already generating profits from AI [5] - Established chipmakers like Nvidia and Broadcom are leading the AI boom, though they carry risks [6] - Companies in adjacent industries, such as crypto miners and nuclear energy firms, are also benefiting from the AI trend, but require more research due to higher risks [7] Group 3 - Dividend stocks can be categorized into income stocks and growth stocks, with income stocks being more suitable for middle-aged or near-retirement investors [8]

Group 1 - Amgen Inc. is recognized as one of the 11 cheap quarterly dividend stocks to buy currently [1] - The company has a strong and diverse portfolio with over two dozen brands, including several blockbuster drugs generating over $1 billion in annual sales [2] - Amgen's medicines cover multiple therapeutic areas, including heart health, bone health, and psoriasis treatment [3] Group 2 - In the second quarter, Amgen reported revenue of $9.2 billion, reflecting a 9% increase from the previous year, while adjusted earnings per share rose 21% to $6.02 [4] - The company has demonstrated consistent dividend growth for 14 consecutive years, currently offering a quarterly dividend of $2.38 per share and a dividend yield of 3.32% as of September 23 [4]

Group 1 - Cardinal Health, Inc. (NYSE:CAH) is recognized as one of the 11 cheap quarterly dividend stocks to buy currently [1] - The company is a significant distributor of branded and generic drugs, medical supplies, and laboratory products, serving over 90% of hospitals in the US and operating in more than 30 countries [2] - Cardinal Health has a strong dividend history, having raised its payout for 39 consecutive years, with a payout ratio of about 25% of this year's expected earnings, indicating potential for further increases [3] Group 2 - The current quarterly dividend offered by Cardinal Health is $0.5107 per share, resulting in a dividend yield of 1.32% as of September 23 [4] - Analysts project an earnings growth of nearly 11% annually over the next three to five years, which could support continued dividend expansion [3]