Which Dividend Stocks Are Worth Adding to Your Portfolio Today?

When building a dividend investing strategy, the mistake many investors make is fixating on yield alone—you might end up with yield traps that sound attractive but lack sustainability. Conversely, chasing high dividend growth stories from years past means missing emerging opportunities with stronger forward returns. The real sweet spot lies in balancing current yields against proven dividend growth track records and healthy payout ratios.

After screening for these factors, three names stand out as compelling opportunities for dividend-focused portfolios right now: Target (NYSE: TGT), Nexstar Broadcast Group (NASDAQ: NXST), and Dillard’s (NYSE: DDS).

Target: A Turnaround Story Gets a Catalyst Boost

Target brings established dividend credentials to the table—it’s a Dividend King with 57 consecutive years of annual dividend increases. The retailer currently offers a forward yield of 4.1% with a payout ratio just under 60%, leaving room for future distribution growth.

What makes Target particularly interesting right now is the recent arrival of a new catalyst. Activist hedge fund Toms Capital has taken a position, potentially pushing for operational improvements. Combined with existing turnaround initiatives already underway, this added pressure could accelerate management’s efforts to unlock value. For dividend investing portfolios, this dual tailwind—established dividend history plus activist momentum—creates an attractive risk-reward setup. Recent share price strength suggests the market is pricing in some of these improvements, but the dividend foundation remains solid.

Nexstar: Broadcasting Assets Meet Cost Synergies

Nexstar Broadcast Group, America’s largest broadcast television station owner, has mastered the art of wringing profitability from legacy media assets through disciplined cost management. The result: 12 consecutive years of dividend growth.

The current forward dividend yield sits at 3.5%, but here’s the kicker—the payout ratio is just 45%. That conservative distribution policy leaves substantial cash generation capacity for debt reduction, buybacks, and strategic deals. Speaking of deals, an upcoming acquisition of Tegna (pending regulatory approval) could unlock meaningful cost synergies, potentially driving additional earnings expansion. If realized, this would provide Nexstar with ammunition to extend its two-decade dividend growth streak even further.

Dillard’s: Buybacks and Distribution Power Reshaping Returns

Few stocks have delivered the sheer outperformance of Dillard’s over the past five years. Between December 2020 and December 2025, department store retailer Dillard’s shares surged more than 1,200%—crushing both the S&P 500 index and beating megacap performers like Nvidia and Bitcoin.

While post-COVID recovery provided the initial spark, what’s sustained the rally is management’s disciplined capital allocation. The company boasts a 15-year track record of consistent dividend growth, with annual payout increases averaging 12.9% over the last five years. Paired with aggressive share repurchase programs, this return-of-capital approach continues generating shareholder value. At a forward yield of 4.8%, Dillard’s offers both current income and potential for further appreciation through buyback support.

Building Your Dividend Investing Blueprint

The common thread across these three stocks is thoughtful capital allocation. Rather than just distributing cash, management teams at Target, Nexstar, and Dillard’s combine dividends with buybacks to maximize shareholder returns. For dividend investing portfolios seeking a mix of current income, proven growth track records, and reasonable valuations, this trio deserves consideration at today’s prices.