11 Best Rising Dividend Stocks to Buy Right Now

Why It Matters

Investors seeking reliable income can capture higher total returns by targeting dividend growers with economic moats, while avoiding yield traps in riskier sectors.

Key Takeaways

• NNN REIT lifted AFFO guidance to $3.53‑$3.59 per share
• NNN’s cash yield sits at 7.5% with $1.2 bn liquidity
• A.O. Smith’s Q1 sales fell 2% YoY, EPS down 11%
• China sales for A.O. Smith dropped 17% in local currency
• Both firms are held by 20‑30 hedge funds each

Pulse Analysis

Morningstar’s dividend framework emphasizes sustainability over headline yields, urging investors to focus on companies that can consistently fund payouts. By filtering for a decade‑long track record of dividend hikes and strong economic moats, the approach weeds out high‑yield anomalies that often stem from distressed sectors. This disciplined lens aligns with the broader shift toward income‑oriented portfolios that value capital preservation and growth, especially as interest‑rate volatility prompts investors to seek reliable cash flow sources.

NNN REIT exemplifies the premium‑quality dividend play. The REIT reported $145 million of new investments at a 7.5% cash yield, while its balance sheet boasts $1.2 billion in liquidity and an 11‑year weighted‑average debt maturity—among the longest in the industry. Management’s decision to raise 2026 AFFO guidance to $3.53‑$3.59 per share and proactively trim the portfolio signals confidence in cash‑flow generation. With 28 hedge funds already on board, the stock’s disciplined, self‑funded growth model reinforces its appeal to income‑focused investors.

Conversely, A.O. Smith illustrates the risks of chasing dividend yields without assessing underlying demand. The company’s Q1 earnings missed expectations, driven by a 1% rise in North American sales but a steep 11% decline in the Rest‑of‑World segment, notably a 17% drop in China. EPS slipped 11% as acquisition‑related costs weighed on margins. While the firm still pays a dividend, the earnings pressure raises questions about future payout growth. Hedge fund interest remains high, but investors should monitor the housing‑market cycle and international exposure before counting on its dividend stability.