3 Dividend Stocks for October 2025
These three stocks have an average yield of more than 5%.
David Harrell: Hi, I’m David Harrell, editor of the Morningstar DividendInvestor newsletter. In this monthly series, we take a look at the dividend prospects of three stocks that are popular with income investors.
3 Dividend Stocks for October 2025
Clorox is a dividend aristocrat, but its recent dividend increases have been modest. The firm has raised its quarterly dividend rate by $0.02 each year for four years running, a steady rate but a declining percentage that is less than 2% each year. The company provided larger increases in the past. Five-year dividend growth is 2.9% annualized, and 10-year growth is 5.1% annualized. The stock currently yields 4%. Looking ahead, dividend growth may accelerate. When assessing the firm’s financial strength, Morningstar analysts said, “We forecast that Clorox will remain steadfast in its charge to enrich shareholder returns, expecting mid-single-digit annual dividend growth over the next 10 years resulting in a payout ratio of around 60% in the longer term.” The stock is currently trading at a 25% discount to its $166 Morningstar fair value estimate.
Kraft Heinz, which recently announced plans to split into two firms, reduced its quarterly dividend rate to 40 cents from 60.25 cents in 2019, and it has remained there ever since. Despite the lack of subsequent increases, the stock’s yield has moved up over the past five years as a result of the downward trend in the share price, and the stock now trades at a 50% discount to its $51 Morningstar fair value estimate. The current yield of 6.2% exceeds those of its category peers such as Campbell’s CPB, General Mills GIS, and Kellanova K.
Despite the firm’s challenges and its efforts to reduce leverage, management has remained devoted to returning cash to shareholders via the dividend. Also, while it certainly provides no guarantee, the Sept. 2 press release announcing plans for the separation included this statement: “In aggregate, the current dividend level is expected to be maintained.” If that holds true, current investors would expect the same total dividend payout from their shares following the split, which is expected to close in the second half of 2026. Morningstar analysts forecast mid-single-digit annual increases in the dividend beginning in the next couple of years.
The 1.8% dividend increase that Verizon declared in early September is in line with its 2% annualized dividend growth over the past five years. While growth has been modest, the stock now yields 6.3%, slightly above its five-year average of 5.7%. Morningstar analysts note that the current dividend rate consumes less than 60% of free cash flow, providing plenty of cushion to maintain this income stream for shareholders. The stock currently trades near a 20% discount to its $53.00 Morningstar fair value estimate.
I’m David Harrell from Morningstar DividendInvestor. Thanks for watching, and we’ll see you next month.
Watch 3 Dividend Stocks for September 2025 for more from this series.
The author or authors own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.
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