As investors navigate a mixed market landscape, a curated list of high-yield dividend stocks for November 2025 highlights companies that blend quality, value, and attractive yields. The selection process, which aims for a long-term annual growth rate of 12%, has been refined to provide a broader range of investment ideas.
While the broader S&P 500 index continued its upward trend in October, the high-yield dividend sector faced headwinds. This divergence underscores the importance of selective stock picking for income-focused investors looking for potential long-term value.
Key Takeaways
- A specialized watchlist of high-yield dividend stocks posted a five-year compound annual growth rate (CAGR) of 14.49%.
- The selection criteria have been expanded to test separate portfolios focusing on "Quality" and "Value" metrics.
- United Parcel Service (UPS), Accenture (ACN), and EOG Resources (EOG) are highlighted as significantly undervalued with double-digit expected returns.
- NextEra Energy (NEE) joins the top 10 list for November, replacing PepsiCo (PEP).
Market Performance Creates Divergence
October presented a complex picture for investors. The S&P 500, tracked by the SPDR S&P 500 ETF Trust (SPY), gained 2.38%, marking its sixth consecutive month of positive returns and pushing its year-to-date gain to 17%.
However, the momentum did not extend to all market segments. High-yield dividend stocks, represented by the Vanguard High Dividend Yield Index Fund ETF (VYM), experienced a slight decline of 0.26% in October, ending a five-month positive streak.
A specialized watchlist of top 10 high-yield dividend stocks also saw a downturn, falling by 1.10% for the month. Despite this short-term dip, the strategy has demonstrated robust long-term results.
Five-Year Performance
Over the past five years, the high-yield dividend stock strategy achieved a compound annual growth rate (CAGR) of 14.49%. While this trails the S&P 500's 17.44% CAGR, the watchlist offers a starting dividend yield that is more than three times higher than that of the broader market index.
A Refined Strategy for Finding Value
To adapt to changing market conditions and broaden the pool of potential investments, the methodology for selecting top dividend stocks has evolved. Recently, the minimum required dividend yield for consideration was lowered from 2.75% to 2.5%.
This adjustment is designed to include more high-quality companies that may have slightly lower yields but strong growth potential. For November, the strategy has been further expanded to test two additional approaches alongside the original blended model.
- Original Portfolio: A balanced approach blending quality and value metrics.
- Quality Portfolio: Focuses on stocks with better historical growth trends and higher potential future returns.
- Value Portfolio: Emphasizes stocks trading at a significant discount to their fair value and offering higher starting yields.
This multi-portfolio approach allows for a more nuanced analysis, catering to different investor preferences. The average stock in the Value portfolio, for instance, is estimated to be 43% undervalued with a forward dividend yield of 4.05%.
Spotlight on November's Dividend Contenders
The November 2025 watchlist features several compelling companies that appear to be trading at significant discounts. One notable change to the top 10 list is the inclusion of NextEra Energy (NEE), a major player in the renewable energy sector, which replaces PepsiCo.
United Parcel Service (UPS)
UPS stands out with a forward dividend yield of 6.80%. The logistics giant is currently estimated to be trading at a 72% discount to its fair value, suggesting a potential expected rate of return of over 19%.
Accenture (ACN)
The global consulting firm offers a forward dividend yield of 2.61% and is considered to be trading at a 67% discount to its fair value. Its projected rate of return is estimated at approximately 21.04%, driven by strong earnings growth forecasts.
EOG Resources (EOG)
This energy company provides a solid 3.85% forward dividend yield. EOG Resources is believed to be trading at a 40% discount, with an expected rate of return of 13.57% over the next five years.
Long-Term Success Rate
An analysis of the strategy's history reveals a high success rate. Over the past 60 months, 95 unique companies have appeared on the top 10 list. Of those, 77 stocks—or 81%—have generated a positive total return since their first appearance.
Consistency in a Shifting Market
While monthly performance can fluctuate, the long-term data suggests that a disciplined approach to selecting high-yield, undervalued stocks can be effective. The primary goal of the watchlist is to generate investment ideas that can outperform a target of a 12% CAGR over time.
"The target rate of return is a 12% CAGR, so it's nice to see this strategy maintain a healthy cushion after 5 full years."
The analysis also tracks the performance of stocks that appear frequently on the list. Among the 32 stocks that have been featured at least 10 times, 28 have resulted in positive returns, representing an 87.50% success rate under a buy-and-hold simulation.
Top-performing stocks from the watchlist's history include Broadcom (AVGO), which has returned over 790% in 54 months, and JPMorgan (JPM), with a return of nearly 260% over 60 months. These examples highlight the potential for significant gains when quality and value align.
