The wave of dividend payouts in US stocks is coming | How to position in high-dividend sectors in 2025

Why Focus on US Stock Dividends Now?

Entering 2025, the US stock market presents new investment opportunities. Although the average dividend yield of the S&P 500 is only 1.2%, a near 20-year low, this does not mean there are no income opportunities. On the contrary, a group of undervalued high-dividend-quality companies exist, with dividend yields surpassing 5% or even 6%, providing investors seeking stable cash flow with an effective hedge against uncertainty.

According to the latest data, after last year’s rally, dividend payout expectations across the entire US stock market are adjusting. Mainstream Wall Street investment banks are highly aligned—2025 US stock dividends are expected to enter a new growth cycle.

Drivers and Outlook for US Stock Dividends

Fundamentally, corporate earnings growth is the core driver of dividend increases. Starting in 2024, the earnings per share (EPS) of S&P 500 constituents have begun to accelerate, which typically translates into dividend growth after about three quarters.

Authoritative institutions are optimistic about the dividend outlook for 2025:

• Goldman Sachs forecast: S&P 500 EPS will grow by 11%, driving a 7% increase in dividends
• Bank of America Securities forecast: With earnings acceleration, dividend growth could reach 12%
• S&P Dow Jones analysis: Total dividends are expected to hit a record high of approximately $685 billion (compared to $630 billion in 2024)

This means that if you currently hold high-dividend US stocks, dividends in the next 12 months could see significant growth.

Detailed Analysis of 5 Selected High-Dividend US Stocks

Based on current market data, the following companies stand out in terms of yield and growth potential:

Brookfield Renewable (BEPC)—A New Blue Ocean in Renewable Energy

This company controls one of the world’s largest pure renewable energy portfolios, with a capacity of 6,707 MW. Its assets are spread across Canada, the US, Brazil, and other regions, including 204 hydroelectric facilities and 28 wind projects, achieving true geographic and business diversification.

Q3 2024 results show revenue of $4.444 billion (up 19.62% YoY), reflecting strong growth momentum. JPMorgan Chase maintains an overweight rating with a target price of $28.

Enbridge (ENB)—A Leader in Energy Infrastructure with 22 Years of Dividend Growth

As the hub of North American energy transportation, Enbridge controls pipeline networks across Canada and the US, with operations in liquid transportation, natural gas distribution, and renewable energy. The company has increased dividends for 22 consecutive years, a rare feat among mature companies, demonstrating its robust cash flow generation.

The latest target price was raised to $63 by Royal Bank of Canada, maintaining a “buy” rating.

Realty Income (O)—A Dividend Machine in Commercial Real Estate

This REIT focuses on single-tenant commercial properties, holding over 12,000 properties with a total leasable area of 230 million square feet. Its scale and long-term net lease agreements ensure stable cash flow.

Q3 2024 revenue was $3.931 billion (up 30.91% YoY), with a net profit of $666 million and EPS of $0.75. Analysts maintain a buy rating with a target price of $66.50.

Verizon (VZ)—A Defensive Telecom Giant

As the largest wireless service provider in the US and a Dow Jones 30 component, Verizon has a mature and stable business model. In Q4 2024, revenue was $35.7 billion, up 1.7% YoY, exceeding market expectations. Although its stock price has fallen 35% over the past five years, its 6.99% dividend yield sufficiently offsets the psychological impact of the decline.

Vici Properties (VICI)—Beneficiary of the Experience Economy

This company owns a top-tier portfolio of entertainment real estate, including iconic casinos and hotels in Las Vegas. In Q3 2024, revenue was $2.873 billion (up 7.2% YoY), with a net profit of $2.097 billion, demonstrating strong asset value support. Barclays has issued a buy rating for the first time, with a target price of $36.

Investment Advantages of High-Dividend US Stocks

Stable Cash Returns: Annualized dividends of 5-7%, far exceeding bank deposits and bond yields

Quality Screening: Companies capable of stable dividends usually have mature business models, ample cash flow, and strong market positions

Capital Appreciation Potential: High-quality dividend stocks often come from growth sectors, offering both income and growth potential

Hedging Tool: Compared to the volatility of growth stocks, dividend stocks perform more steadily, helping to balance your portfolio

Portfolio Diversification: Using dividend stocks from traditional industries to hedge risks in high-growth sectors like technology

Four Steps to Select High-Dividend US Stocks

Step 1: Industry Screening and Company Research

Identify 3-5 leading companies within 1-2 industries of interest, focusing on their financial health, profit trends, and growth prospects. Key indicators include revenue growth rate, net profit margin, and free cash flow.

Step 2: Assess Dividend Stability

Review 5-10 years of historical data to see if the company can maintain relatively stable earnings through economic cycles. This determines dividend reliability.

Step 3: Analyze Dividend History and Policy

Examine dividend growth over the past 3-5 years, prioritizing companies with continuous increases or stable dividends. Also, understand the payout ratio (total dividends/net profit) to ensure it is reasonable; excessively high ratios may pose risks.

Step 4: Compare Payout Ratios and Analyst Opinions

Calculate and compare dividend payout ratios across companies, and consider the latest ratings and target prices from mainstream brokerage analysts. Make comprehensive decisions based on multiple sources of information.

Risks of High-Dividend US Stocks

It is important to note that not all high-dividend stocks are worth investing in. Some companies may appear to have high payout ratios but could have high debt levels, unstable profits, or business models under question. These companies face risks of dividend cuts or suspensions.

Therefore, thorough research, financial analysis, and risk assessment are essential before investing. High dividends do not mean zero risk; rational investing is the key to long-term returns.