3 Table-Pounding Buys for Dividend Investors in May 2025

Dividend investing can be among the most frustrating investing styles for those thinking long-term. While I do think buying and holding dividend stocks for the long-term is a preferable strategy for those looking to create passive income in retirement, it’s also true that such a strategy is much less “sexy” than buying growth stocks and watching one’s portfolio surge during bull markets. Indeed, over the past 15 years, dividend investors have vastly outperformed those who have tilted their portfolios much more heavily toward growth stocks. 

That said, the good news is that after this incredible rally in many of the so-called “Magnificent 7” gems that have driven most of the gains in the market in recent years, certain dividend stocks look very undervalued relative to their growth prospects and the stability they provide.

It’s my view that more and more investors are likely to flock toward dividend stocks as a way to remain defensive in this current environment. Here are three stocks I think dividend investors should consider table-pounding buys, as more investors search for stability and income right now.

Occidental Petroleum (OXY)

Let’s kick off this list with a Warren Buffett-approved pick, shall we? 

Occidental Petroleum (NYSE:OXY) continues to be one of the companies Warren Buffett’s Berkshire Hathaway (NYSE:BRK-B) continues to buy on an ongoing basis, and that strategy has broadly worked out well. However, as investors will note from the chart above, it’s clear that Buffett continues to see a buying opportunity in accumulating more shares at current levels after this run up. And if there’s any Wall Street-adjacent person I’d follow into a trade, it’s Mr. Buffett.

That said, aside from the blessing from the Oracle of Omaha, there are other key reasons why dividend investors may want to consider Occidental as a long-term holding. For one, the company’s strong growth on both the top and bottom line position this company as one of the best operators in the energy sector. For those looking for exposure to this sector, Occidental does appear to be the top choice of many top money managers, and that’s due largely to the company’s strong fundamentals.

Occidental’s recent earnings report showed the kind of strength dividend investors want to see, with EPS of $0.87 beating analyst expectations and leading to a price-earnings multiple of less than 17-times. That may be considered rich for many companies in the energy sector, and there are certainly dividend yields out there much higher than 2.3%. But it’s also true that Occidental has been among the most aggressive companies in raising their dividend in recent years, suggesting this bottom line growth will continue. Occidental’s overall distribution has surged 85% over the past three years alone. Three more years of such increases, and dividend investors won’t be worried about today’s seemingly low yield. 

Schwab U.S. Dividend Equity ETF (SCHD)

For investors looking for more passive exposure to dividend stocks, the Schwab U.S. Dividend Equity ETF (SCHD) is an excellent option to consider. This low-cost and highly-diversified exchange traded fund provides exposure to some of the highest-quality dividend stocks with long-term growth potential. Screening out companies who do not have as robust of a dividend payout history as many investors would like to see, those thinking long-term really can sleep well at night owning this portfolio of mostly blue chip dividend names.

One of the issues around dividend investors is that juicy yields tend to come alongside risk. Accordingly, companies that pay both meaningful dividends (with the potential to increase their dividends over time) but are also stable and large enough to weather economic storm clouds, are hard to come by. This highly diversified portfolio of dividend stocks is among the best out there, given that SCHD only includes companies with at least 10 years of consecutive dividend increases.

With a current dividend yield of more than 4% and a high likelihood that this distribution will increase over time, I’d much rather keep my income-generating portion of my portfolio in an ETF like SCHD over a money market fund, at least for now. 

Fortis (FTS)

One of the more overlooked dividend stocks I continue to come back to (and is one of my top table-pounding buys right now) is Canadian utility company Fortis (NYSE:FTS). 

Fortis’ status as a regulated utility giant provides long-term dividend investors with the kind of stability they’re looking for. And similar to Occidental, Fortis’ 3.6% dividend yield is one I wouldn’t balk at.

Why? Well, Fortis is a dividend king, having raised its distribution for more than 50 years straight. There’s been quite a few recessions and economic downturns over the past five decades. So, this sort of dividend growth policy is one that many investors can get behind, particularly those who do see economic storm clouds ahead. 

Fortis is targeting growth of around 4% to 6% in the coming years, and should raise its dividend by roughly that amount. Fortis has been among the leading companies I look to for capital redistribution to shareholders. And with a reasonable payout ratio and a valuation of around 19-times forward earnings, there’s good reason to hold this stock long-term. 

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