3 Dividend Stocks Outperforming the S&P 500 in 2025

Investors have been buying up dividend stocks in droves in recent months due to broader market volatility. This doesn’t really mean that investors are really into dividends right now. When treasuries are yielding higher rates than the inflation rate and are comparable to most dividend stocks while being “riskless,” you’d expect the number of people holding dividend stocks to decline.

What has instead happened is that the new tariff regime has thrown investors into disarray, and they have been rotating their gains into companies with stable cash flows. And any mature business with a stable cash flow generally pays plenty of dividends to keep its shares attractive. Here are three that have outperformed the S&P 500 so far this year. Since the S&P 500 is down year-to-date, I’ll just be looking into stocks that have had positive gains.

AT&T (T)

It’s hard to mention high-yield dividend stocks without mentioning AT&T (NYSE:T), well, at least at one point it was. The stock used to yield well over 6% less than two years back. But the company has made a massive turnaround since, and it is the biggest success story bar far among big-cap telecom companies.

T stock has nearly doubled from its August 2023 price to where it is at today, and it has handily outperformed the broader market with a 20.3% year-to-date gain.

Now that it has recovered, there isn’t much upside potential left, but I do think the 4% dividends are not too bad. AT&T seems to have learned from its mistakes of using too much debt and has been aggressively deleveraging its balance sheet. Debt has declined from $195.8 billion at the end of 2021 to $140.92 billion by the end of 2024.

AT&T reported net interest losses at $6.1 billion for FY 2022, $6.7 billion for FY 2023, and $6.8 billion for all of FY 2024.

And while those losses are staggering, so is the turnaround. AT&T went from posting losses of $8.5 billion in FY 2022 to a profit of $10.9 billion for FY 2025. If the trends continue and rates are cut, T stock could be one of the hottest media/telecom stocks.

T stock currently yields 4.04%.

Franklin Resources (BEN)

Franklin Resources (NYSE:BEN) has also been an underperformer. The stock has only been on a long-term downtrend if you zoom out on the chart. It plateaued in 2014 before starting a multi-year decline that has continued since. There have been plenty of recovery rallies, but none of them turned into anything meaningful.

However, a true recovery may be close.

But first, let’s take a look at why BEN stock has underperformed for so long in the first place. The broader asset management industry has seen significant investor migration from actively managed mutual funds (Franklin’s traditional strength) to passive products like ETFs. This trend has led to persistent net outflows.

Not only that, Franklin struggled to grow assets under management (AUM) organically during a period when global markets and wealth were expanding. Most AUM growth in recent years has come from acquisitions (notably Legg Mason), not from attracting new client assets.

Regardless, there’s a good chance the stock could be close to bottoming out and a recovery. Alternative investments are becoming very popular, and the company is expanding aggressively here. It raised $6.8 billion in Q2 2025 alone and is targeting $100 billion in private markets over five years. It is also expanding into ETFs and digital assets. The firm’s ETF business has enjoyed 14 consecutive quarters of positive net flows with $37 billion in AUM.

Revenue is finally on the uptrend, and outflows have declined significantly and could reverse as we enter a new economic cycle. Plus, you’re getting a 6.14% dividend yield with a payout ratio of just 56.78%.

UGI Corp (UGI)

UGI Corp (NYSE:UGI) is an energy distribution company. This company has multiple arms. It delivers natural gas to homes and businesses through UGI Utilities, and you’ve also probably heard of AmeriGas. That’s UGI. This is the biggest company delivering propane. UGI Energy Services is the midstream arm, and there’s also an international segment.

The revenue here is quite diversified. AmeriGas is their largest segment by revenue and posted $848 million in Q2 sales. The utilities segment generated $727 million in revenue, whereas UGI International and the midstream segment posted $650 million and $587 million in revenue, respectively. Profits-wise, the utilities segment is the biggest and had an EBIT of $240 million.

The stock is on a recovery rally after a selloff that started in mid-2021 and accelerated in 2023. This recovery could continue since the company is now seeing solid tailwinds. It increased its fiscal 2025 EPS guidance to $3 to $3.15. Analysts see revenue growth at 9.6% for FY 2025 and 8.2% for FY 2026. If we take the midpoint of the guidance, this means flat EPS growth for the year, but EPS is also expected to start growing again in the coming years.

In the meantime, you can sit on the 4.29% dividend yield here. This company is a Dividend Aristocrat with 37 consecutive years of dividend hikes.

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