2 Top Dividend Stocks to Buy Right Now

In the ever-changing landscape of the stock market, investors are constantly on the lookout for stable income sources. With the tariffs under the Trump administration rattling global markets and shaking investors' confidence, the search for portfolio stability has become more critical than ever. Dividend stocks, which distribute a portion of their profits to shareholders on a regular basis, offer a lifeline in volatile markets. Here, we delve into two top dividend stocks that stand out as excellent choices for income-seeking investors: Rithm Capital (RITM) and Darden Restaurants (DRI).

Rithm Capital (RITM): A High-Yield Dividend Stock with Strong Growth Prospects

Rithm Capital, a global asset manager focused on real estate, credit, and financial services, has consistently paid dividends since its inception in 2013. With a dividend yield of about 8.9%, Rithm Capital offers an attractive option for investors seeking stable income. The company recently announced a dividend of 25 cents per share for the first quarter, demonstrating its commitment to returning value to shareholders. Since its inception through the fourth quarter of 2024, Rithm Capital has paid about $5.8 billion in dividends, showcasing a strong track record of dividend payments.

RBC Capital analyst Kenneth Lee reiterated a buy rating on RITM stock with a price target of $13, citing the company's pivot towards becoming an alternative investment manager. Lee noted that management intends to change its corporate structure to become more of an alternative investment manager than a mortgage REIT or real estate firm, which could enhance value and provide more upside potential. This strategic shift, if executed successfully, could lead to increased cash flows and a stronger ability to sustain and potentially increase dividend payments.

Lee also highlighted that management is evaluating a potential listing or spin-off of Newrez, a mortgage origination platform. This move would enable RITM to re-assign capital away from mortgage service rights/mortgages into other investment areas, potentially increasing the company's profitability and cash flows. Lee ranks No. 28 among more than 9,400 analysts tracked by TipRanks, with his ratings being profitable 70% of the time, delivering an average return of 17.5%. This analyst's positive outlook further supports the idea that Rithm Capital has the potential to sustain and increase its dividend payments.

Darden Restaurants (DRI): A Reliable Dividend Stock with Strong Financial Performance

Darden Restaurants, which owns the Olive Garden and LongHorn Steakhouse chains, recently reported better-than-expected earnings for the third quarter of fiscal 2025 but missed the Street's revenue expectations due to unfavorable weather. Despite this, Darden declared a quarterly dividend of $1.40 per share, offering a dividend yield of 2.8%. JPMorgan analyst John Ivankoe reaffirmed a buy rating on DRI stock and boosted the price target to $218 from $186, citing the company's strong financial performance and growth prospects.

Ivankoe highlighted that the quarter-to-date comparable sales trends for Q4 FY25 are tracking above 3% at both the flagship Olive Garden and LongHorn brands, indicating continued operating margin expansion from 12.1% in FY25 to 12.3% in FY28. This expansion is partially fueled by above-average Olive Garden comparable sales and the company's decision to bring back its "Buy One, Take One" offer to boost traffic. Additionally, the systemwide rollout of Uber Direct at qualifying Olive Garden restaurants and a 10-store pilot at Cheddar's with plans for a wider rollout further support the company's growth prospects.

Ivankoe's positive outlook is backed by his ranking of No. 241 among more than 9,400 analysts tracked by TipRanks, with his ratings being successful 66% of the time, delivering an average return of 13.5%. This analyst's confidence in Darden's ability to sustain and potentially increase its dividend payments is further validated by the company's strong financial performance and growth prospects.

Conclusion

In conclusion, both Rithm Capital and Darden Restaurants stand out as top dividend stocks due to their attractive dividend yields, strong dividend histories, positive analyst recommendations, and solid financial foundations. Their dividend yields are competitive within their respective sectors, making them appealing options for investors seeking stable income. As the market continues to navigate through uncertainties, these two stocks offer a reliable source of passive income and potential for future growth.