Income investors are always looking for ways to improve their yield without overdoing it on risk.With the biggest returns over the past few years belonging to tech and artificial intelligence (AI) stocks, it'd be easy to forget that dividend stocks still deserve a spot in your portfolio. As investors look forward to 2026, the case for dividend payers is actually improving, and the uptrend may have already begun.Over the past three months, the performance of the Vanguard High Dividend Yield ETF (VYM +0.85%) ...

On the dividend front, Pepsi's 4% dividend yield is impressive. But I'd argue the company's 53-year track record of raising its dividend is even more impressive.Despite concerns that the company's business model is inherently cyclical, we've seen robust sales through past down markets. Thus, I'd argue his is a dividend stock with a solid defensive tilt.Pepsi's upside in the past has come from immense pricing power, which I'd argue hasn't gone away. The ability for Pepsi to raise prices on its core snack bus ...

Core Insights - KNOT Offshore Partners LP (NYSE:KNOP) is recognized as one of the best micro-cap stocks to invest in according to analysts [1] - Alliance Global downgraded KNOT Offshore Partners from Buy to Neutral, citing limited upside potential following a buyout offer, with the offer potentially reaching the $12 per unit range [2] - For Q3 2025, KNOT Offshore reported revenue of $96.9 million, operating income of $30.6 million, net income of $15.1 million, and adjusted EBITDA of $61.6 million, with 93% of vessel time in 2026 covered by fixed contracts, increasing to 98% if all options are exercised [3] Financial Performance - The company reported Q3 2025 revenue of $96.9 million and adjusted EBITDA of $61.6 million [3] - Operating income for the same period was $30.6 million, with net income at $15.1 million [3] - A significant portion of vessel time in 2026 is secured by fixed contracts, indicating strong revenue visibility [3] Market Position - KNOT Offshore Partners operates shuttle tankers under long-term charters primarily in the North Sea and Brazil [3] - The company is viewed as having potential as an investment, although some analysts suggest that certain AI stocks may offer greater upside potential [4]

Core Insights - The article discusses the importance of preparing for retirement and highlights the best energy stocks for retirement portfolios, emphasizing the need for thoughtful investment strategies to ensure financial stability during retirement [2][4][6]. Retirement Preparedness - A study from Vanguard indicates that only 40% of workers aged 61 to 65 are financially aligned with their retirement goals, suggesting a significant portion may face income shortfalls [2][3]. - The median individual in this age group is projected to have a yearly income gap of about $9,000, which is approximately 24% below the required amount to maintain their lifestyle in retirement [3]. Investment Strategies - Dividend-paying stocks are favored by many investors for retirement portfolios due to their historical performance and lower volatility compared to the broader market [4][5]. - The energy sector is noted for its strong commitment to dividends, with an annual underlying dividend growth rate of 3% reported by Janus Henderson, and total dividends paid in 2024 reaching $166.2 billion, up from $118.9 billion in 2018 [5]. Best Energy Stocks - The article outlines a methodology for selecting the best energy stocks, focusing on companies with consistent dividend growth over the past decade, an annual dividend yield exceeding 3%, and stock gains of at least 20% over the same period [8]. - The selection process also considers the number of hedge funds invested in these stocks, as following top hedge fund picks has historically led to market outperformance [9]. Company Highlights - **Enterprise Products Partners L.P. (NYSE:EPD)**: Recognized as a leading North American midstream energy service provider, it has 26 hedge fund holders. Recent analyst updates include a price target increase from $33 to $34 by Morgan Stanley, while JPMorgan downgraded its rating from 'Overweight' to 'Neutral' [10][11][12]. - **Enbridge Inc. (NYSE:ENB)**: This midstream energy operator has 27 hedge fund holders and recently increased its quarterly dividend by 2.9% to C$0.97 per share, marking 31 consecutive years of dividend growth. The company forecasts a distributable cash flow of C$5.70 – C$6.10 per share for FY 2026, reflecting a 4% increase from previous guidance [13][14][15][16][17].

Core Insights - The article emphasizes the potential for generating significant income with minimal effort and capital through careful investment choices [1] Investment Strategy - A starting investment of $2,500 in select stocks and exchange-traded funds (ETFs) can yield impressive results [1]

Core Insights - Successful passive income investing can be achieved without significant costs or extensive effort [1] Group 1 - Passive income strategies can be accessible and manageable for a wide range of investors [1] - The approach to passive income does not necessarily require high expenses or intensive labor [1]

Core Viewpoint - UPS is currently perceived as a low-growth dividend stock, but it has significant potential to enhance profitability in the coming years, particularly with a stock price of $100 offering a dividend yield of 6.56% [1][12]. Investment Proposition - UPS stock presents a complex investment case with conflicting factors, as it is not a typical mature company with stable dividends nor is it fully capitalizing on its potential for revenue growth [3][5]. - The company is struggling to generate sufficient cash to cover its $5.5 billion annual dividend and $1 billion in buybacks, yet it has a plan to improve productivity and return on equity (RoE) [6][10]. Financial Metrics - Current market capitalization of UPS is $81 billion, with a current stock price of $95.99 and a gross margin of 18.48% [7]. - The company is projected to generate $4.7 billion in free cash flow (FCF) this year, while maintaining its dividend commitment [7][8]. Management Strategy - UPS management is focused on maintaining its dividend while transitioning away from less profitable Amazon deliveries and increasing its presence in higher-margin sectors like small and medium-sized enterprises (SMEs) and healthcare [8][9]. - Investments in productivity-enhancing technologies are ongoing, with a notable reduction of 93 buildings this year to improve operational efficiency [8]. Future Outlook - UPS aims to pay about 50% of its earnings in dividends, but projected earnings per share for 2026 are only $7.17, indicating a delay in meeting dividend coverage requirements [10]. - The company may need to increase its debt to sustain dividend payments unless it exceeds market expectations for earnings and cash flow [10][13]. Market Sentiment - Bulls see an opportunity for significant dividends as underlying improvements may lead to better earnings and dividend coverage [12]. - Bears are concerned about the sustainability of the dividend amidst potential cash flow issues and external factors like tariffs affecting profitability [13][14].

Core Insights - Caterpillar Inc. (NYSE:CAT) is recognized as a leading dividend stock suitable for long-term investors [2][4] - The company has diversified its business beyond heavy machinery into brand licensing and financial services [3] - Despite challenges from tariffs, Caterpillar's stock has seen a significant increase, reflecting strong investor confidence [4] Business Overview - Caterpillar Inc. is a global leader in heavy machinery, producing construction and mining equipment, diesel and natural gas engines, industrial turbines, and diesel-electric locomotives [2] - The company operates through a comprehensive dealer network that spans every continent [2] Financial Performance - Caterpillar has maintained a 31-year streak of dividend growth, making it attractive for income-focused investors [5] - On October 6, the company declared a quarterly dividend of $1.51 per share, consistent with previous dividends, resulting in a dividend yield of 1.21% as of October 9 [5] Market Challenges - Tariffs have presented challenges for the company, with projected costs reaching $1.8 billion by 2025 [4] - A recent federal appeals court ruling has introduced uncertainty regarding the future of many Trump-era tariffs [4]

Core Insights - The article discusses the importance of investing in dividend stocks, particularly those with a history of consistent dividend growth, which can provide stability during economic downturns [2][3] Dividend Stocks Overview - Companies that consistently raise dividends are often strong, profitable, and financially stable, making them valuable during economic slowdowns [2] - Dividend-growth stocks tend to have durable competitive advantages, allowing them to maintain profit margins even during high inflation [2] - Historically, dividends have grown at an average annual rate of 5.7% since 1957, outpacing the average inflation rate by over 2% [3] - Stock prices are noted to be more than twice as volatile as their dividend cash flows, indicating that dividend stocks may offer a more stable investment [4] Methodology for Stock Selection - The article outlines a methodology for selecting dividend stocks based on year-to-date highest-returning stocks as of October 9, 2025 [6] Featured Dividend Stocks - **Fastenal Company (NASDAQ:FAST)** - YTD Return as of October 9: 31.55% - Fastenal is linked to the health of the US and global economies and has a strong dividend history with 26 consecutive years of increases [8][10] - Current quarterly dividend: $0.22 per share, with a dividend yield of 1.88% [10] - **General Dynamics Corporation (NYSE:GD)** - YTD Return as of October 9: 31.7% - The company is a major player in military shipbuilding and has raised its dividend for 28 consecutive years [11][12] - Current quarterly dividend: $1.50 per share, with a dividend yield of 1.75% [12] - **Cardinal Health, Inc. (NYSE:CAH)** - YTD Return as of October 9: 33.7% - Cardinal Health is a major distributor of healthcare products and has increased its dividends for 39 consecutive years [13][15] - Current quarterly dividend: $0.5107 per share, with a dividend yield of 1.30% [15]

Core Viewpoint - Investors are particularly attracted to dividend stocks with high yields due to their ability to provide substantial passive income and significant total return potential [1] Group 1 - Dividend stocks are favored by investors for their high yields [1] - These stocks offer a substantial passive income stream [1] - High-yield dividend stocks present significant total return potential [1]