10 Top-Performing Dividend Stocks for the Quarter

Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide investors with steady incomes, cushion against market downturns, and grow investments at a healthy clip.

In the first quarter of 2024, the top-performing dividend payers included specialty retail firm Advance Auto Parts AAP, independent power producer NRG Energy NRG, and conglomerate MDU Resources Group MDU.

To find the quarter’s 10 best-performing income-focused stocks, we screened the Morningstar Dividend Leaders Index, which tracks the performance of the 100 highest-yielding stocks from a broad basket of consistent dividend payers.

The Top-Performing US Dividend Leaders of Q1 2024

1. Advance Auto Parts AAP
2. NRG Energy NRG
3. MDU Resources Group MDU
4. Citigroup C
5. Phillips 66 PSX
6. Southwest Gas Holdings SWX
7. Lincoln National LNC
8. CVR Energy CVI
9. Western Union WU
10. AbbVie ABBV

How Have Dividend Stocks Performed?

Over the past quarter, the Morningstar Dividend Leaders Index rose 8.3%, leading dividend stocks overall, which rose 8.2% as measured by the Morningstar Dividend Composite Index. In the 12 months leading up to March 31, the Leaders Index gained 14.2% and the Composite Index gained 19.5%.

The overall US stock market, as measured by the Morningstar US Market Index, has gained 10.2% on the quarter and 29.8% on the year.

Yields and Metrics for Q1′s Best-Performing Dividend Stocks

Advance Auto Parts

Specialty retail firm Advance Auto Parts rose 39.8% in the first quarter and lost 28.2% over the past 12 months. Trading at $85.09 per share, it has a forward dividend yield of 1.18%. Advance Auto Parts pays investors an annual dividend of $1 per share. The stock, which has no economic moat, is trading near its quantitative fair value estimate, leaving it with a quantitative Morningstar Rating of 3 stars.

NRG Energy

Independent power producer NRG Energy rose 31.7% in the first quarter and gained 101.9% over the past 12 months. At $70.15 per share, its stock has a forward dividend yield of 2.32% and an annual dividend of $1.63 per share. The stock, which has no economic moat, is significantly overvalued, trading 71% above its fair value estimate of $41 per share. It has a Morningstar Rating of 1 star.

MDU Resources Group

Conglomerate MDU Resources Group gained 27.9% in the first quarter and rose 15.8% over the past 12 months. The stock’s $25.45 price gives it a forward dividend yield of 1.96%. MDU Resources Group pays investors an annual dividend of $0.50 per share. The stock, which has no economic moat, is fairly valued and has a quantitative Morningstar Rating of 3 stars.

Citigroup

Diversified bank Citigroup rose 24% in the first quarter and gained 39.3% over the past 12 months. Trading at $63.46 per share, Citigroup stock has a forward dividend yield of 3.31% and an annual dividend of $2.12 per share. The stock, which has no economic moat, is trading near its fair value estimate of $66 per share. It has a Morningstar Rating of 3 stars.

Phillips 66

Oil and gas company Phillips 66 gained 23.5% in the first quarter and rose 65.3% over the past 12 months. Trading at $163.34 per share, its forward dividend yield is 2.57%. Phillips 66 pays investors $4.20 per share annually. The stock, which has a narrow economic moat, is trading at a 31% premium to its fair value estimate of $125 per share, leaving it moderately overvalued. It has a Morningstar Rating of 2 stars.

Southwest Gas

Regulated gas company Southwest Gas gained 21.2% in the first quarter and rose 25.9% over the past 12 months. At $75.58 per share, Southwest Gas stock has a forward dividend yield of 3.28% and an annual dividend of $2.48 per share. The stock, which has no economic moat, is moderately undervalued, trading 10% below its quantitative fair value estimate. It has a quantitative Morningstar Rating of 4 stars.

Lincoln National

Life insurance company Lincoln Financial Group rose 20.1% in the first quarter and gained 50.1% over the past 12 months. Trading at $31.60 per share, Lincoln Financial Group stock has a forward dividend yield of 5.7% and an annual dividend of $1.80 per share. The stock, which has no economic moat, is trading near its quantitative fair value estimate. It has a quantitative Morningstar Rating of 3 stars.

CVR Energy

Oil and gas company CVR Energy rose 19.3% in the first quarter and gained 22.5% over the past 12 months. Trading at $36.72 per share, CVR Energy stock has a forward dividend yield of 5.45% and pays investors an annual dividend of $2 per share. The stock, which has a narrow economic moat, is trading near its quantitative fair value estimate, leaving it with a quantitative Morningstar Rating of 3 stars.

Western Union

Credit services firm Western Union gained 19.3% in the first quarter and rose 33.8% over the past 12 months. The stock’s $13.74 price gives it a forward dividend yield of 6.84%. Western Union pays investors an annual dividend of $0.94 per share. With a fair value estimate of $17 per share and a narrow economic moat, the stock is moderately undervalued, trading at a 19% discount. It has a Morningstar Rating of 4 stars.

AbbVie

Drug manufacturer AbbVie rose 18.5% in the first quarter and gained 18% over the past 12 months. At $180.76 per share, AbbVie has a forward dividend yield of 3.43% and an annual dividend of $6.20 per share. The stock, which has a wide economic moat, is trading near its fair value estimate of $168 per share. It has a Morningstar Rating of 3 stars.

What Is the Morningstar Dividend Leaders Index?

The Morningstar Dividend Leaders Index captures the performance of the 100 highest-yielding stocks with consistent records of paying dividends and can sustain those payments.

It’s a subset of the Morningstar US Market Index (which represents 97% of equity market capitalization) that includes only securities whose dividends are qualified income. Real estate investment trusts are excluded. Companies are screened for dividend consistency and sustainability. Each must have a positive five-year dividend per share growth and a dividend coverage ratio greater than 1. The 100 highest-yielding stocks are included in the index, weighted by the dollar value of their dividends. See the full rulebook here.

The Best Dividend Stock Leaders: More Ideas to Consider

Investors who would like to find more top-performing or cheap dividend stocks can do the following:

• Review the full list of stocks in the Morningstar Dividend Leaders Index. Stocks with Morningstar Ratings of 4 or 5 stars are undervalued, according to our metrics.
• Use the Morningstar Investor Screener tool to find the best dividend stocks according to your specific criteria. You can search for stocks based on their dividend yields, valuation measures like price/earnings ratios, and more.
• Use Morningstar Investor to build a watchlist of the best dividend stocks and easily follow those stocks’ valuations, ratings, and dividend yields.
• Watch our dividend stock video series, hosted by David Harrell, for ideas to consider.

When it comes to buying stocks, it’s more than just dividends. Read here about how valuations and competitive advantages—known as economic moats—matter to a stock’s potential for outperformance.

Companies that are not formally covered by a Morningstar analyst have quantitative ratings. These companies are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative moat, fair value, and uncertainty rating.

This article was compiled by Bella Albrecht and edited by Lauren Solberg.

As part of our mission to put more information into the hands of investors, this article was compiled from Morningstar’s data and independent research using automation technology. The original article was written by Morningstar reporters and editors. This updated version was reviewed by an editor.