3 Dividend Kings Outshining the Market in 2025

Key Points

• Amid a turbulent 2025, defensive dividend stocks have emerged as top performers while the S&P 500 remains down 5.5% year-to-date.
• Philip Morris, AT&T, and Williams Companies have each significantly outpaced the broader market, offering both income and relative strength.
• With strong dividend yields, positive earnings momentum, and bullish technical setups, these three stocks stand out as potential 'risk-off' opportunities. 

So far, 2025 hasn't exactly been kind to investors. The S&P 500 is down 5.5% year-to-date, weighed down by mounting uncertainty, tariffs, fears of an economic slowdown, and concerns over stretched valuations, particularly in growth-oriented technology stocks. This risk-off environment has prompted many investors to seek safety, leading them to turn to defensive sectors and dependable dividend payers.

As market sentiment shifts toward caution, dividend stocks with strong yields and relative outperformance have become increasingly attractive. A select few, including some dividend aristocrats and kings, have emerged not only as stable income generators but also as some of the market's top performers this year.

Let’s take a closer look at three dividend names that have significantly outperformed the market in 2025.

Philip Morris Stock Soars 41% YTD, Smoke-Free Strategy and Dividend Strength Drive Investor Appeal

Philip Morris NYSE: PM has quietly become one of the S&P 500’s top performers in 2025, with shares up an impressive 41% year-to-date, making it the fourth-best-performing stock in the index. The company offers a 3.17% dividend yield and boasts 17 consecutive years of dividend increases, making it a staple for income-focused investors.

What’s driving the rally? The company’s strategic pivot toward smoke-free products, such as IQOS and ZYN, is beginning to yield results. Philip Morris aims to generate two-thirds of its revenue from smoke-free products by 2030, and it’s already making progress. On April 23, the company posted Q1 2025 earnings of $1.69 per share, beating estimates by $0.08. Revenue grew 5.8% to $9.3 billion, also topping expectations.

Management credited the quarter’s strength to continued adoption of smoke-free products and operational efficiency. The company plans to expand its reach in smoke-free offerings, maintain disciplined cost control, and continue its shareholder-friendly policies. With both growth and income appeal, PM remains a compelling name in a challenging market.

AT&T Stock Surges 65% in 12 Months: Strong Dividend, and Bullish Momentum in Focus

AT&T NYSE: T, the world’s largest telecommunications company by revenue, has surprised many this year, not just with its reliable 4% dividend yield, but also with its remarkable stock performance. The stock has surged 20% year-to-date and is now up a stunning 65% over the past year. Currently trading just 6% below its 52-week high and sitting above all key moving averages, AT&T is exhibiting strong bullish momentum and clear relative strength versus both the broader market and its sector.

On April 23, the company reported Q1 2025 earnings, with EPS of $0.51, just a penny shy of consensus estimates. However, revenue grew 2% year-over-year to $30.63 billion, beating expectations. Despite the slight earnings miss, sentiment remains bullish, as the company's underlying operations strength stood out, mainly with subscriber growth that outpaced key rivals.

 AT&T holds a Moderate Buy consensus rating from analysts, with a price target that implies nearly 5% upside from current levels. With a reliable dividend and continued momentum, AT&T has proven to be one of the few large-cap companies that have stood out in this volatile market.

Williams Companies Combines Growth, Yield, and Analyst Optimism

While not as well-known as the previous two, Williams Companies NYSE: WMB has quietly carved out a spot among the market’s top-performing dividend names in 2025. The $73 billion energy infrastructure firm operates a vast network of natural gas pipelines and processing assets across the U.S., making it a key player in the country’s energy backbone.

WMB shares are up 10% year-to-date, and the stock trades just 3% below its 52-week high, consolidating in a bullish setup above all key moving averages. The stock offers a 3.35% dividend yield, supported by a three-year dividend growth rate of 5%, making it appealing to both growth and income investors.

Williams is set to report Q1 2025 earnings on May 5. In its most recent report from February, the company met EPS expectations at $0.47. Since then, Morgan Stanley and Barclays analysts have raised their price targets; however, the overall consensus remains a Moderate Buy, with a target price that implies a modest downside.

Substantial earnings or guidance could quickly shift that narrative, though, so potential investors should pay close attention to its upcoming earnings.