10 Top-Performing Dividend Stocks of Q2 2024

Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide investors with steady incomes, cushion against market downturns, and grow investments at a healthy clip.

In the second quarter of 2024, the top-performing dividend payers included independent power producer NRG Energy NRG, tobacco company Philip Morris International PM, and specialty chemicals company International Flavors & Fragrances IFF.

To find the quarter’s 10 best-performing income-focused stocks, we screened the Morningstar Dividend Leaders Index, which tracks the performance of the 100 highest-yielding stocks from a broad basket of consistent dividend payers.

The Top-Performing US Dividend Leaders of Q2 2024

• NRG Energy NRG
• Philip Morris International PM
• International Flavors & Fragrances IFF
• Williams Companies WMB
• Southern Company SO
• 3M MMM
• Altria Group MO
• Allete ALE
• OGE Energy OGE
• M&T Bank MTB

How Have Dividend Stocks Performed?

Over the past quarter, the Morningstar Dividend Leaders Index, which captures the 100 highest-yielding names, was roughly flat. The broad Morningstar Dividend Composite Index was roughly unchanged. In the 12 months leading up to June 30, the Dividend Leaders Index gained 17.3% and the Dividend Composite Index gained 15.6%.

The overall US stock market, as measured by the Morningstar US Market Index, has gained 3.5% on the quarter and 23.8% on the year.

Yields and Metrics for Q2′s Best-Performing Dividend Stocks

NRG Energy

Independent power producer NRG rose 15.6% in the second quarter and gained 112.4% over the past 12 months. Trading at $77.86 per share, its stock has a forward dividend yield of 2.09%. NRG Energy pays investors an annual dividend of $1.63 per share. The stock, which has no moat, is trading at a 90% premium to its fair value estimate of $41 per share, leaving it with a Morningstar Rating of 1 star.

Philip Morris International

Tobacco company Philip Morris rose 12.0% in the second quarter and gained 9.1% over the past 12 months. At $101.33 per share, its stock has a forward dividend yield of 5.13% and an annual dividend of $5.20 per share. The stock, which has a wide moat, is trading near its fair value estimate of $106 per share. It has a Morningstar Rating of 3 stars.

International Flavors & Fragrances

Specialty chemicals company International Flavors & Fragrances gained 11.2% in the second quarter and rose 22.7% over the past 12 months. The stock’s $95.21 price gives it a forward dividend yield of 1.68%. International Flavors & Fragrances pays investors an annual dividend of $1.60 per share. With a fair value estimate of $130 per share and a wide moat, the stock is moderately undervalued, trading at a 27% discount. It has a Morningstar Rating of 4 stars.

Williams Companies

Midstream oil and gas company Williams rose 10.3% in the second quarter and gained 35.9% over the past 12 months. Trading at $42.50 per share, Williams stock has a forward dividend yield of 4.47% and an annual dividend of $1.90 per share. The stock, which has a narrow moat, is moderately overvalued, trading 12% above its fair value estimate of $38 per share. It has a Morningstar Rating of 2 stars.

Southern Company

Regulated electric company Southern gained 9.1% in the second quarter and rose 14.4% over the past 12 months. Trading at $77.57 per share, its forward dividend yield is 3.71%. Southern pays investors an annual dividend of $2.88 per share. The stock, which has a narrow moat, is trading at a 12% premium to its fair value estimate of $69 per share, leaving it moderately overvalued. It has a Morningstar Rating of 2 stars.

3M

Conglomerate 3M gained 8.4% in the second quarter and rose 19.3% over the past 12 months. At $102.19 per share, 3M stock has a forward dividend yield of 2.74% and an annual dividend of $2.80 per share. The stock, which has a narrow moat, is trading near its fair value estimate of $118 per share. It has a Morningstar Rating of 3 stars.

Altria Group

Tobacco company Altria rose 6.7% in the second quarter and gained 9.2% over the past 12 months. Trading at $45.55 per share, Altria stock has a forward dividend yield of 8.61% and an annual dividend of $3.92 per share. The stock, which has a wide moat, is moderately undervalued, trading 21% below its fair value estimate of $58 per share. It has a Morningstar Rating of 4 stars.

Allete

Utilities company Allete rose 5.7% in the second quarter and gained 12.3% over the past 12 months. Trading at $62.35 per share, Allete stock has a forward dividend yield of 4.52% and pays investors an annual dividend of $2.82 per share. The stock has a quantitative Morningstar Rating of 3 stars.

OGE Energy

Regulated electric company OGE gained 5.3% in the second quarter and rose 4.1% over the past 12 months. The stock’s $35.70 price gives it a forward dividend yield of 4.69%. OGE pays investors an annual dividend of $1.67 per share. With a fair value estimate of $38 per share and a narrow moat, the stock is moderately undervalued, trading at a 6% discount. It has a Morningstar Rating of 4 stars.

M&T Bank

Regional bank M&T rose 5.0% in the second quarter and gained 26.5% over the past 12 months. At $151.36 per share, M&T has a forward dividend yield of 3.57% and an annual dividend of $5.40 per share. The stock, which has a narrow moat, is trading near its fair value estimate of $160 per share. It has a Morningstar Rating of 3 stars.

What Is the Morningstar Dividend Leaders Index?

The Morningstar Dividend Leaders Index captures the performance of the 100 highest-yielding stocks that have consistent records of paying dividends and can sustain those payments.

It’s a subset of the Morningstar US Market Index (which represents 97% of equity market capitalization) that includes only securities whose dividends are qualified income. Real estate investment trusts are excluded. Companies are screened for dividend consistency and sustainability. Each must have a positive five-year dividend per share growth and a dividend coverage ratio greater than 1. The 100 highest-yielding stocks are included in the index, weighted by the dollar value of their dividends. See the full rulebook here.

The Best Dividend Stock Leaders: More Ideas to Consider

Investors who would like to find more top-performing or cheap dividend stocks can do the following:

• Review the full list of stocks in the Morningstar Dividend Leaders Index. By our metric, stocks with Morningstar Ratings of 4 or 5 stars are undervalued.
• Use the Morningstar Investor Screener tool to find the best dividend stocks according to your specific criteria. You can search for stocks based on their dividend yields, valuation measures like price/earnings ratios, and more.
• Use Morningstar Investor to build a watchlist of the best dividend stocks and easily follow those stocks’ valuations, ratings, and dividend yields.
• Watch our dividend stock video series, hosted by David Harrell, for ideas to consider.
• When it comes to buying stocks, it’s more than just dividends. Read here how valuations and competitive advantages—known as economic moats—factor into a stock’s potential for outperformance.
• Watch this video to learn how Morningstar uses the star rating, moat rating, and other metrics to evaluate stocks.

Companies that are not formally covered by a Morningstar analyst are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative star rating.