3 Dividend Stocks for November 2025

Key Concepts

• Dividend Investor Newsletter: A publication focusing on stocks popular with income investors.
• ADR (American Depositary Receipt): A negotiable certificate issued by a U.S. depositary bank representing a specified number of shares of a foreign company's stock.
• Dividend Yield: The annual dividend payment per share divided by the stock's current market price.
• Payout Ratio: The proportion of a company's earnings paid out as dividends.
• Fair Value Estimate: Morningstar's assessment of a stock's intrinsic value.
• Dividend Aristocrat: A company that has increased its dividend for at least 25 consecutive years.
• Dividend King: A company that has increased its dividend for at least 50 consecutive years.
• Capital Allocation: A company's strategy for distributing its financial resources, including dividends, share buybacks, and reinvestment.

Stock Analysis for Income Investors

This summary details the dividend prospects of three stocks analyzed by David Herrell, editor of the Morning Star Dividend Investor newsletter. The analysis focuses on dividend yield, payout ratios, dividend growth forecasts, and valuation relative to Morningstar's fair value estimates.

Diageo

• Company Profile: Diageo is a global producer of alcoholic beverages, with well-known brands including Guinness, Captain Morgan Rum, and Crown Royal Canadian Whiskey. The company is headquartered in London and also trades in the U.S. as an ADR.
• Dividend Details: Diageo pays a semiannual dividend. Based on the two most recent payments, the current dividend yield is 4.4%.
• Financials and Outlook: Morningstar equity analysts report that Diageo distributes approximately 50% of its earnings as dividends, which is considered standard for its industry. They forecast an approximate 18% increase in the annual dividend by 2029.
• Valuation: The stock is currently trading in "four-star territory," indicating a discount of over 25% to its fair value estimate of $130 per ADR share.

GSK (GlaxoSmithKline)

• Company Profile: GSK is a pharmaceutical firm.
• Dividend History and Adjustment: Morningstar equity analysts previously viewed GSK's dividend payments as historically too high, noting that for the past five years, the company paid out roughly 70% of normalized earnings as dividends. This was believed to have limited GSK's ability to reinvest in internal research and development (R&D) and external acquisitions of new pipeline drugs. However, following the divestment of its consumer group in 2022, GSK reduced its dividend to a more appropriate level.
• Current Dividend and Outlook: The reduced dividend rate is considered secure and is expected to grow in line with earnings over the next five years. Holders of U.S. ADR shares receive a quarterly payout of $0.32, which translates to an annual dividend rate of $1.70 and a yield of 3.7% at current exchange rates.
• Valuation: GSK trades at a 20% discount to its fair value, also placing it in four-star territory.

Kimberly Clark

• Company Profile: Kimberly Clark is a leading manufacturer in the tissue and hygiene sector, with brands such as Kleenex, Huggies, and Kotex.
• Dividend Aristocrat/King Status: The company holds the distinction of being both a Dividend Aristocrat and a Dividend King, having increased its per-share annual dividend payout for 53 consecutive years.
• Dividend Growth: The 3.3% dividend hike for 2025 aligns with its 5-year annualized dividend growth rate of 3.44%.
• Current Yield and Peer Comparison: The stock currently yields 4.3%, which is slightly above its 5-year average and higher than that of peers like Procter & Gamble and Unilever.
• Capital Allocation and Outlook: Morningstar analysts observe that Kimberly Clark remains committed to returning cash to shareholders. Their long-term outlook projects mid-single-digit annual dividend growth.
• Valuation: The stock is trading at a 15% discount to its $140 fair value estimate, placing it, like the other two stocks discussed, in four-star territory.

Conclusion

David Herrell concludes by noting that all three stocks – Diageo, GSK, and Kimberly Clark – are currently trading in four-star territory, indicating they are undervalued relative to their fair value estimates. This suggests attractive opportunities for income investors seeking dividend-paying stocks with solid prospects for dividend growth and capital appreciation.