I’m happy to share my top picks for dividend investing this February 2025. After sorting through my data points with a 30-step process, I’ve identified five stocks that I feel meet most of the requirements for reliable returns. One that I already own in my stock portfolio is Johnson & Johnson (JNJ), a familiar name well known for its dividends streak. My personal checklist doesn’t just look at past results, it also weighs future market signals.
You might wonder why I’m so keen on these companies. The answer is that careful planning can support consistent safe dividends, something I truly value in my own portfolio. Whether you’re exploring dividend stocks for the first time or have been at it forever, these picks balance stability and growth in a way that gives me real confidence. Each one aims for both growth and income, two qualities that can make all the difference. Ready to learn more?
Dividend Stock No.1
Are you looking for a leading name in healthcare? Johnson & Johnson fits that profile. It holds a Brand Ranking of 153 and has a wide economic moat. The company runs three main divisions—Consumer Health, Pharmaceuticals, and MedTech. These divisions cover everyday products and advanced treatments.
Financially, I see Johnson & Johnson (JNJ) reporting stable revenue, net income, margins, free cash flows, and rising dividends. Its Return on Equity is 24.77%, while Return on Invested Capital is 14.15%. Both numbers show it can make steady profits. JNJ also holds an Aaa rating from Moody’s, which means strong credit quality. Its low debt level makes it safer for long-term investors.
If you want faster growth, though, there are some concerns. JNJ’s revenue growth (CAGR) over the last ten years is only 1.67%. The net income CAGR is -1.05%, and the EPS CAGR is 0.39%. These are all below my standards. Its dividend payout ratio is 79.71%, which may limit future dividend raises. Also, the Price-to-Book ratio of 5.19 is higher than I expect.
Still, JNJ offers a total yield of 3.25% and has a fair value slightly above its current market price. In my view, Johnson & Johnson earns a Dividend Prince Rating of 7.33 out of 10. It’s a dependable choice for steady income, though it’s not the best for growth.
Dividend Stock No.2
ADP is another Blue-Chip stock. It has a Brand Ranking of 202 and provides cloud-based human capital management services. This includes Employer Services and PEO, which focus on HR and payroll.
From a financial standpoint, ADP’s net income has grown by 10.48% per year, and EPS has risen by 12.10% (CAGR) over the past decade. With a Return on Equity of 55.63% and a Net Profit Margin of 19.76%, ADP shows it can manage its resources well.
ADP also has an Aa3 rating from Moody’s, showing a strong balance sheet. Its debt ratios look low, with a Debt-to-Equity of 0.57 and a Debt-to-Assets of 0.05.
On the other hand, its dividend yield is 1.91%, which is below my 2% minimum. The Price-to-Book ratio of 24.14 is quite high. Returns on tangible assets (5.63%) and invested capital (4.98%) also fall short of my targets.
Morningstar’s estimate suggests ADP’s share price may be higher than its fair value, which could mean overvalued.
Even so, ADP has a solid history of revenue, earnings, and dividend growth. Its Piotroski Score of 9 (the highest score 😊) and ESG Risk Rating of 15.12 suggest it’s well-managed. Overall, I rate ADP at 7.33 out of 10 on my Dividend Prince scale. It’s steady but offers a lower yield, so it’s good if you want dividend safety more than high payouts.
Dividend Stock No.3
Medtronic ranks among the largest makers of medical devices worldwide, carrying a Brand Ranking of 270. Its operations are split into four areas—Cardiovascular, Medical Surgical, Neuroscience, and Diabetes—giving it broad coverage in healthcare.
Looking at the numbers, Medtronic has maintained consistent revenue, net income, profit margins, and free cash flows. Its dividend yield of 3.05% might catch your eye if you value passive income, and a Moody’s rating of A3 speaks to its strong credit standing. Debt levels also appear manageable, with a Debt-to-Equity of 0.54 and Debt-to-Assets of 0.29. The Price-to-Book figure of 2.42 seems relatively in line with what I’d expect. Morningstar fair value of $112 shows a potentially decent entry price.
Still, growth has been under the required level: revenue CAGR is 5.00%, net income CAGR is 4.83%, and EPS CAGR is 3.00%, all below what I like to see. A Net Profit Margin of 13.00% doesn’t exactly meet the 15% threshold, either. On top of that, the dividend payout ratio hits 84.54%, which could harm future dividend increases. Return on Equity (7.59%) and Return on Invested Capital (6.05%) are also on the weaker side.
Although Medtronic delivers a steady dividend, it hasn’t shown reliable increases in that payout. Its competitive moat is however “Narrow”—indicating it may be as secure in the long run as other healthcare names. Factoring it all together, Medtronic earns a Dividend Prince Rating of 6.33 out of 10, offering moderate income potential for those who value a lower-growth healthcare stock.
Dividend Stock No.4
PepsiCo is a major brand in the beverage and snack industries. It holds a Brand Ranking of 107 and has a wide reach in consumer goods, operating through seven global segments.
Financially, PepsiCo shows consistent revenue, profit margins, net income, free cash flow, and regular dividend increases. Its average Return on Equity over 10 years is 52.18%. Return on Tangible Assets is 14.93%, and Return on Invested Capital is 14.65%.
The company has an A3 rating from Moody’s, which is a good sign for its credit standing. With a 3.54% dividend yield, PepsiCo might attract those who want steady payouts.
On the downside, PepsiCo’s 3.26% revenue CAGR, 3.69% net income CAGR, and 4.51% EPS CAGR do not meet my preferred growth goals. A Net Profit Margin of 10.18% seems low for a brand of its size, and a Dividend Payout Ratio of 75.99% may restrict bigger dividend raises. Debt is also worth noting, with a 2.63 Debt-to-Equity ratio and 0.45 Debt-to-Assets ratio.
Still, PepsiCo remains a stable dividend payer. Morningstar estimates a fair value of $174, which could mean it’s slightly undervalued. Balancing the pros and cons, I give it a Dividend Prince Rating of 6.33 out of 10. It’s reliable for income seekers but not a top bargain.
Dividend Stock No.5
UPS is a well-known Blue-Chip stock (Ranking 56) in global logistics. It has a broad moat, covering both U.S. Domestic Package and International Package in over 200 countries.
In terms of finances, UPS shows stable revenue, net income, profit margins, and it regularly raises its dividends. It also holds a Return on Equity of 227.60%, Return on Tangible Assets of 11.71%, and Return on Invested Capital of 11.07%. These metrics indicate efficient use of capital.
Moody’s gives UPS an A2 rating, and the dividend yield of 4.87% might interest investors who want more income.
However, its growth figures are moderate. The 10-year revenue CAGR is 4.52%, net income CAGR is 6.45%, and EPS CAGR is 7.19%. A Net Profit Margin of 6.25% is not very impressive. The Dividend Payout Ratio of 95.08% is extremely high, which could limit future dividend hikes.
Debt is another concern. UPS has a Debt-to-Equity ratio of 11.46 and a Debt-to-Assets ratio of 0.37. It also carries a high Price-to-Book ratio of 6.77.
Even with these issues, UPS pays a consistent dividend. Morningstar fair value estimate is $145, so there could be some room for growth. Considering its positives and negatives, I rate UPS at 6.33 out of 10 on the Dividend Prince scale. It’s an option for dividend income, but keep an eye on its heavy debt.
These five picks all came from my 30-step selection process. Each stock has its own strengths and weaknesses for a dividend portfolio:
Johnson & Johnson is known for its stable reputation.
ADP shows strong resource management but offers a lower yield.
Medtronic provides moderate income with some room for better growth.
PepsiCo has steady dividends, yet its future raises might be limited.
UPS features a strong dividend payout and decent returns, though it has a large amount of debt.
Each stock speaks to different investor goals, whether you want steady income, potential value, or long-term growth. I think a careful mix of these choices can balance risk and reward. Remember, these picks reflect my own approach and style, so make sure they match your needs and comfort level.
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