3 Big Dividend Plays With Strong Earnings to Back Them

Key Points

Investors select dividend stocks for their stability, but even these companies can demonstrate impressive earnings beats.
Waste Management, Eversource, and Johnson & Johnson all reported earnings with positive news for the second quarter of 2025.
By continuing to demonstrate their ability to perform, these companies reaffirm their value to investors as dividends plays.

Long-term dividend plays tend to be more stable than many other stocks—after all, this stability is why they are able to provide consistent dividends in the first place. Traditional dividend stocks are large, well-established companies that are unlikely to experience significant volatility apart from trends affecting the broader market.

That said, even favorite names among dividend investors can cause shareholder anxiety if their fundamentals shift to the point that they have to consider reducing or even canceling distributions. It's essential for dividend stocks to maintain their top and bottom lines, their cash flow, and other key elements in order to be able to confidently continue to pay—and hopefully increase—their payouts to investors. That's why earnings season is important for dividend stocks, including those companies that are so established that they may not otherwise draw much attention when they release a report.

Let's take a look below at three dividend-paying favorites that also had strong earnings for the most recent quarter, a sign that their distributions remain robust.

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Earnings Beat, Reduced Expenses, Strong Cash Flow For Waste Management

Waste and recyclables collection services giant Waste Management Inc. (NYSE: WM) is a compelling dividend play owing to the vital and consistent nature of the work the company does. It's also large, with a network of hundreds of landfills across the country and a market capitalization of more than $92 billion.

These factors have helped Waste Management to build a 22-year history of dividend increases, alongside a dividend yield of 1.43% and a payout ratio just under 49%.

Signs of continued growth in the firm's fundamentals will help to ensure that it can maintain this dividend momentum into the future. The company's second-quarter 2025 earnings report provides just that. Waste Management noted beats on both earnings per share (EPS) and revenue, as the latter of these figures climbed by 19% year-over-year (YOY). The strength of its collection and disposal business also fueled significant gains in EBITDA.

Dividend investors will also be happy to see that Waste Management's operating expenses dropped relative to revenue, now making up less than 60% of revenue as of last quarter, thanks to improvements in telematics. With winter approaching, the company made a small trim to revenue guidance, but with expected free cash flow approaching $3 billion for the year, it appears Waste Management's dividend payouts continue to be solid.

Earnings Growth—Though Slow—and Rate Increase Boosts Eversource

Utility firms like Eversource Energy (NYSE: ES) also draw the attention of dividend investors because of their defensive status. Eversource is a major utility provider in the northeast, offering electricity, gas, and water services.

While the company's 4.56% dividend yield will interest investors, it has a less stable dividend payout ratio of 129.2%—meaning that it has paid out more in dividends than it has generated in income—and only two years of recent dividend increases.

Growing earnings is essential to keeping the dividend payout ratio down, and Eversource managed to do so this last quarter, if only by a penny per share. Analysts had expected EPS to remain flat YOY at 95 cents, but the company beat predictions with 96 cents.

The growth from this quarter helped Eversource reaffirm its full-year EPS guidance as well as its long-term growth target of up to 7% through 2029.

While revenue performance was not as strong—the company's 12% YOY improvement in this area fell slightly short of predictions—electric demand is growing steadily, and a $100-million permanent rate increase in New Hampshire should help provide stability going forward.

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All-Around Strong Performance Buoys Johnson & Johnson

Healthcare products giant Johnson & Johnson (NYSE: JNJ) is a standout dividend stock, with a whopping 64 years of steady payout increases, a compelling yield of 3.06%, and a sustainable payout ratio of 55.6%.

The company's mid-July earnings report shows that it can continue to impress—it beat EPS predictions by 9 cents and revenue estimates by nearly $900 million.

Johnson's innovative medicine business, particularly its oncology line, is fueling this growth. The company's drug candidate TAR200 for non-muscle-invasive bladder cancer could generate some $5 billion in peak sales.

Immunology and the cardiovascular section of the company's MedTech business were also standouts.

All of these signals point to JNJ remaining an excellent dividend play going forward in the foreseeable future.

Written by Nathan Reiff

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