10 Top-Performing Dividend Stocks

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 February 2024, the top dividend-paying stocks included agricultural firm Scotts Miracle-Gro SMG, Southwest Gas Holdings SWX, and asset management company Carlyle Group CG.

To find the month’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 February 2024

1. Scotts Miracle-Gro SMG
2. Southwest Gas Holdings SWX
3. Carlyle Group CG
4. Best Buy BBY
5. MDU Resources Group MDU
6. UGI UGI
7. Oneok OKE
8. Janus Henderson Investors JHG
9. Packaging Corporation of America PKG
10. Ford Motor F

How Have Dividend Stocks Performed Over the Past Year?

In the 12 months leading up to Feb. 29, the Morningstar Dividend Leaders Index rose 5.3%, trailing dividend stocks overall, which rose 14.9% as measured by the Morningstar Dividend Composite Index.

During the same period, the overall US stock market gained 29.4% as measured by the Morningstar US Market Index.

Yields and Metrics for the Best-Performing Income Payers

Scotts Miracle-Gro

Agricultural inputs company Scotts Miracle-Gro rose 18% in February to end the last 12 months down 17.2%. Trading at $65.70 per share, its stock has a forward dividend yield of 4.02%. Scotts pays investors an annual dividend of $2.64 per share. The narrow-moat stock is currently trading at a 31% discount to its fair value estimate of $95 per share, leaving it moderately undervalued.

Southwest Gas

Regulated gas firm Southwest Gas rose 17.2% in February, leaving it up 12.1% over the past year. At $68.15 per share, the stock has a forward dividend yield of 3.64% and an annual dividend of $2.48 per share. The narrow-moat stock is moderately undervalued, trading 12% below its quantitative fair value estimate of $77.05 per share.

Carlyle Group

Asset management company Carlyle gained 15.4% in February to end the last 12 months up 37.3%. The stock’s $45.84 price gives it a forward dividend yield of 3.05%. Carlyle pays investors an annual dividend of $1.40 per share. With a fair value estimate of $48 per share, the narrow-moat stock is fairly valued.

Best Buy

Specialty retail firm Best Buy rose 11.6% in February, leaving it up 1.7% over the past year. Trading at $80.88 per share, Best Buy stock has a forward dividend yield of 4.65% and an annual dividend of $3.76 per share. The narrow-moat stock is moderately undervalued, trading 12% below its fair value estimate of $92 per share.

MDU Resources Group

Conglomerate MDU Resources gained 11.1% in February to end the last 12 months up 0.1%. Trading at $21.68 per share, its forward dividend yield is 2.31%. MDU pays investors $0.48 per share annually. The no-moat stock is trading near its quantitative fair value estimate of $23.28 per share.

UGI

Regulated gas firm UGI gained 10.6% in February, leaving it down 30.3% over the past year. At $24.48 per share, UGI stock has a forward dividend yield of 6.13% and an annual dividend of $1.52 per share. The no-moat stock is trading near its quantitative fair value estimate of $32.06 per share.

Oneok

Oil and gas midstream company Oneok rose 10.1% in February to end the last 12 months up 20.7%. Trading at $75.12 per share, Oneok stock has a forward dividend yield of 5.27% and an annual dividend of $3.96 per share. The narrow-moat stock is trading near its fair value estimate of $70 per share.

Janus Henderson Investors

Asset management firm Janus Henderson rose 9.7% in February, leaving it up 19.2% over the past year. Trading at $31.16 per share, Janus Henderson stock has a forward dividend yield of 5.01% and pays investors an annual dividend of $1.56 per share. The narrow-moat stock is currently trading near its fair value estimate of $29 per share.

Packaging Corporation of America

Packaging and containers company Packaging Corporation of America gained 9.2% in February to end the last 12 months up 36.2%. The stock’s $181.19 price gives it a forward dividend yield of 2.76%. Packaging Corporation of America pays investors an annual dividend of $5 per share. With a fair value estimate of $121 per share, the no-moat stock is significantly overvalued, trading at a 50% premium.

Ford Motor

Auto manufacturer Ford rose 9% in February, leaving it up 9.5% over the past year. At $12.44 per share, Ford has a forward dividend yield of 4.82% and an annual dividend of $1.32 per share. The no-moat stock is moderately undervalued, trading 35% below its fair value estimate of $19 per share.

What Is the Morningstar Dividend Leaders Index?

The Morningstar Dividend Leaders Index captures the performance of the 100 highest-yielding stocks that have 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 how valuations and competitive advantages—known as economic moats—matter when it comes 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.