5 Top Nasdaq Dividend Stocks for Growth & Income

Exelon (EXC) represents a compelling utility play within the Nasdaq Composite, offering investors a 3.35% dividend yield with significant growth potential. As a utility holding company delivering electricity and natural gas, Exelon benefits from essential, inelastic demand for its services. The company’s current pipeline of 17 GW in queue, with another 16 GW undergoing assessment, totals 33 GW of potential data center demand – enough electricity to power all homes in California, New York, and Texas combined.

CEO Calvin Butler emphasized during the Q2 earnings call that this substantial pipeline stems from data centers and high-density load projects in their service territories. With Bank of America research analysts noting that electricity supply is still struggling to catch up with rapid demand increases, Exelon stands to benefit significantly. The stock has already gained approximately 27% year-to-date, while maintaining a conservative 58.65% payout ratio that leaves ample room for future dividend increases.

Amgen (AMGN) provides investors with a stable biopharmaceutical dividend play, offering a 3.14% yield with impressive consistency. The company’s diverse portfolio of drugs for cancer, heart disease, weak bones, and rare illnesses has supported remarkable dividend stability over the past decade. With a 42% dividend payout ratio and an 8.5% annual three-year dividend growth rate, Amgen demonstrates strong financial discipline.

PepsiCo (PEP), despite recent challenges since summer 2023, remains a formidable dividend investment as a Dividend King with 52 years of consecutive increases. The company’s 3.7% dividend yield comes amid significant revenue growth from $67.16 billion in 2019 to $91.85 billion in 2024, despite investor concerns about GLP-1 drugs impacting its snack business. As margins recover, PepsiCo has substantial room for a significant turnaround while maintaining its impressive dividend track record.

Automatic Data Processing (ADP) demonstrates how established technology companies can thrive in the AI era. The company, which handles payroll and compliance paperwork, has seen its net margin surge from 16.25% in 2019 to nearly 20% today. Rather than being disrupted by AI, ADP has leveraged the technology to become leaner and more efficient, as most customers lack the expertise to integrate AI systems in-house.

Kimberly-Clark (KMB) offers defensive characteristics rare among Nasdaq stocks, with its portfolio of diapers, tissues, and hygiene products generating inelastic demand. The company’s 4.15% forward dividend yield comes with 52 years of consecutive dividend growth, supported by a approximately 72% payout ratio. Analysts see bullish prospects for the coming decades due to aging demographics, as Kimberly-Clark’s Adult Care products, including diapers for the elderly and bladder leakage solutions, position the company for sustained growth.

These five Nasdaq dividend stocks challenge the conventional wisdom that the index is exclusively home to high-volatility, non-dividend-paying tech companies. Each offers a unique combination of yield stability and growth potential, with dividend yields ranging from 2.19% to 4.15% and payout ratios that suggest room for future increases.

The diversity of sectors represented – from utilities and biopharmaceuticals to consumer staples and business services – provides investors with balanced exposure to the Nasdaq Composite’s dividend-paying cohort. With strong cash flows supporting lengthy dividend growth records spanning 26 to 52 years, these companies demonstrate that income investors can find reliable opportunities beyond the traditional NYSE dividend stalwarts.