Investors nervous about President Donald Trump's tariffs have one thing on their minds: S&P 500 dividends.
The safety and security of dividends are winning investors over — as the rest of the S&P 500 suffers amid Trump's tariffs. Six of the top 10 performing actively traded U.S. diversified ETFs this year are dividend plays, says Morningstar Direct. The winner among the group is First Trust Morningstar Dividend Leaders ETF, which returned 8.8% this year. That's pretty stellar when the S&P 500 is down nearly 5%.
But investors have their favorites even among dividend stocks.
Picking Favorite Dividend Plays
What's the top high-flying dividend stock? Struggling drugstore chain CVS is on top. It's the top-performing stock this year in First Trust Morningstar Dividend Leaders, up 51%. And it yields 3.9% on top of that.
The stock's chart is looking better, too. It sports an RS Rating of 93. The stock, too, is forming a giant cup pattern with a buy point of 83.25. Earnings growth is improving, too. Analysts think EPS will rise 9% in 2025 and 16% in 2026.
Following CVS, tobacco giant Philip Morris is the next top dividend stock in the ETF. It's up 31% this year and yields 3.4% to boot. Philip Morris also has a strong RS Rating of 96. And analysts expect profit to rise 8% in 2025 and 10% in 2026.
Monitoring Dividend ETFs
Just a word of caution, though. Due to recent rebalancing of large dividend ETFs, many have started to "diverge in exposure" from each other, said Aniket Ullal, analyst at CFRA.
The Schwab US Dividend Equity ETF boosted its energy sector weight by 8% following a rebalance in March. Meanwhile, Vanguard's largest dividend ETFs are overweight in financials and health care.
And these changes could matter as more money flows into dividend ETFs.
"This could result in the major U.S. dividend ETFs having very divergent returns in 2025 based on how the different sectors perform," Ullal said. "Monitoring these performance differentials is important, since the $504 billion already invested in dividend ETFs, as of March 27, could increase further as equity investors seek safety."
Top Dividend Stocks This Year
Outperformers in First Trust Morningstar Dividend Leaders
| Stock | Symbol | YTD % ch. | Yield % |
|---|---|---|---|
| CVS Health | CVS | 51.4% | 3.9261% |
| Philip Morris International | PM | 31.4% | 3.402 |
| Exelon | EXC | 22.0% | 3.4722 |
| Gilead Sciences | GILD | 20.5% | 2.8201 |
| UGI | UGI | 18.4% | 4.5358 |
| American Electric Power | AEP | 17.5% | 3.4044 |
| Fidelity National Financial | FNF | 17.4% | 3.0731 |
| AbbVie | ABBV | 16.2% | 3.1309 |
| WEC Energy Group | WEC | 15.7% | 3.2758 |
| Chevron | CVX | 15.6% | 4.0887 |
