UnitedHealth, Costco, Schwab US Dividend Equity ETF are leading dividend stocks investors should have on their radar as we close out 2025.
Dividend investing has evolved beyond simple income generation into a strategic hedge against economic shifts, offering not just payouts but also signals of corporate resilience. Dividends now act as a “quality filter” in portfolios, where companies committing to shareholder returns demonstrate disciplined capital allocation amid rising AI-driven disruptions and supply chain volatility.
This approach has gained traction as studies show dividend growers outperforming non-payers by 2% to 3% annually over decades, compounding wealth quietly. Heading into 2026, seeking dividend stocks becomes crucial: With Federal Reserve interest rate cuts expected to be modest and bond yields dipping below 3.5%, equities with reliable dividends — yielding 3% to 4% on average — will outshine fixed-income alternatives, providing inflation-beating returns in a maturing bull market prone to corrections.
The three dividend stocks that follow are among some of the best ones you can buy for 2026 and beyond.
UnitedHealth (UNH)
UnitedHealth (NYSE:UNH) stands out as a dividend leader in the healthcare sector, blending defensive stability with growth potential that positions it to dominate in 2026. As the largest U.S. health insurer by market share, UnitedHealth generates $400 billion in annual revenue. Its current dividend yield hovers around 2.4%, backed by a quarterly payout of $2.16 per share, with 15 consecutive years of increases signaling commitment to shareholders.
What makes UnitedHealth a top contender for next year? Industry-wide repricing in Medicare Advantage plans, effective 2026, will boost reimbursements by up to 5%, directly lifting UnitedHealth ‘s margins after recent regulatory pressures squeezed profits. Analysts project earnings per share to climb 10% in 2026, easily covering the dividend with a free cash flow payout ratio around 36%.
Recent challenges, like cyberattack costs and elevated medical loss ratios at 89%, have depressed the stock 26% year-to-date, creating a buying opportunity at 14 times earnings — below its five-year average.
With aging demographics adding 10 million Medicare enrollees by 2030, UNH’s scale in managed care will capture market share, potentially delivering 15% to 20% total returns in 2026 through dividend growth and stock appreciation. For investors, UnitedHealth offers a rare mix of recession-proof demand, low debt at 0.6 times EBITDA, and a yield that compounds reliably in uncertain times.
Costco (COST)
Costco (NASDAQ:COST) exemplifies dividend reliability in retail, with its warehouse model set to overpower competitors in 2026 through unmatched customer loyalty and operational efficiency.
Operating over 900 locations worldwide, Costco pulls in $260 billion yearly from bulk sales and a 90% membership renewal rate, turning shoppers into recurring revenue streams through annual fees. Its dividend yield sits at 0.5%, but special annual payouts — $15 per share in 2023 — effectively double that to 1%, with 20 years of hikes. For the past decade, it has raised the payout by a compounded rate of 13% annually.
Heading into 2026, Costco’s dominance stems from e-commerce acceleration and international expansion, where online sales surged 13% last quarter. Amid tariff threats and consumer belt-tightening, Costco’s low-markup strategy and private-label Kirkland brand keep prices below rivals, driving same-store sales up 6% even in slowdowns.
The stock trades at 50 times earnings, a premium justified by 10% EPS growth projections for 2026, supported by $8 billion in free cash flow that funds dividends and $5 billion buybacks. Unlike peers hit by inflation, Costco passes on savings via gas and travel perks, boosting foot traffic 5% in tough quarters. For dividend hunters, Costco delivers compounding power, making it a cornerstone for long-term portfolios.
Schwab US Dividend Equity ETF (SCHD)
Schwab US Dividend Equity ETF (NYSEARCA:SCHD) is the third dividend stock set to dominate in 2026. The exchange-traded fund redefines passive income, curating 100 high-quality dividend payers to lead in the current volatile environment. Tracking the Dow Jones U.S. Dividend 100 Index, SCHD selects stocks with 10 years or more of payouts, strong cash flow, and low debt, yielding 3.8% — double the S&P 500‘s — with quarterly distributions like the recent increase to $0.26 per share.
Why will SCHD dominate? Its focus on fundamentals screens out yield traps, emphasizing return on equity above 15% and payout ratios under 60%, resulting in 11% annualized returns since 2011. The ETF’s diversified holdings — 19% energy, 18% consumer staples, and 15% healthcare — offer stability, with top weights like Amgen (NASDAQ:AMGN) and ConocoPhillips (NYSE:COP) providing better than 3% average yields. The 0.06% expense ratio amplifies the dividend’s compounding effects.
Holdings grew dividends 8% last year, outpacing inflation, and a 3-for-1 split in October 2024 boosted accessibility. Analysts eye 10% total returns in 2026, driven by sector rotation into value making SCHD a key holding for hands-off investors.
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