After delaying the market for seven of the last eight years, Morning Star Dividend Leader Index It rebounded in 2025. So far, it has reached 6.5%. Morning Star US Market Indexshows how dividend strategies can drive returns.
The Dividend Leader Index is a collection of 100 top stocks with a consistent history of paying dividends and demonstrating a ability to maintain these payments, struck in the first quarter, rising 9.0% and a 4.6% decline in the market overall. Since then, it has returned some of these profits, slipping 2.3% through the quarter while the market has risen 8.0%.
meanwhileMorning Star Dividend Combined Index– The broad scale of dividend stock performance increases by 4.1% per year; Morningstar US High Dividend Yield Index– Focusing on the top half of the US dividend payment market is up 4.0%. This contrasts with the dividend leader index, the dividend composite index, and the high dividend yield index Everything chased the market.
and lefkovitzMorningstar Index strategists refer to two forces driving outperformance.
The first is a change in sector return trends that is applied across the board to dividend strategies. “In contrast to the past few years, the technology sector has not led, and several members of the epic Seven have stumbled,” says Lefkovitz. “On the other hand, the more defensive and dividend-rich areas of the market are on track.”
The second helps explain why the dividend leader index is outweighing other dividend indices. That structure. This is “a high-yield stock concentration index, heavily weighted on the best candidates, and there were big winners this year,” explains Lefkovitz.
High-tech stocks stumbled in 2025
The technology sector controls the US market index, accounting for 30.9%. This is 13.9% by weight more than twice the weight of Financial Services, the next largest sector. In comparison, Tech is 17.2% of the dividend combined index, accounting for just 4.6% of the dividend leader index. The US market index has not enjoyed the same lift as before, as the Tech Rankings has grown just 2.6% as the third-performance sector this year.
Meanwhile, the utility sector is the top performer so far this year, up 10.7%, with 6.1% of the dividend combined index, 13.1% of the dividend leader index and just 2.4% of the US market index. Consumer defense and financial services focus on dividend indexes, both of which record profits of nearly 5% per year.
Apple AAPL was the largest drug in the stock market in 2025. This accounts for 6.0% of the US market index, which is 1.4 percentage points off the return. In contrast, Apple holds just 2.5% weight on the dividend composite index, losing 0.6 points. The Dividend Leaders Index does not hold Apple at all.
Of the six biggest detractors in the US market index, only Apple and UnitedHealth UNH are in the dividend combined index, but not in the dividend leader index.
It has a big impact on a few names
Given that the Dividend Leaders Index is a collection of just 100 shares, outperformance or poor performance from the top components can have a significant impact on your overall return. Each of the five largest holdings, Verizon Communications CZ, Abbvie ABBV, Chevron CVX, Philip Morris PM, and Pfizer PFE, draws over 6% of weight, accounting for a total of 53% in the top 10 shares. Lefkovitz said that in 2025, several top holdings, Philip Morris (up 53.4%), IBM IBM (up 29.7%) and CVS Health CVS (up 53.8%), were outstanding performers.
“Outperformance of (Dividend Leader Index) high dividend payers over the broader universe is about the individual securities of the index, as opposed to sector and style bias,” explains Lefkovitz.
Of the 6.5% points obtained by the 2025 Dividend Leader Index, only Philip Morris contributed 3.0 points, IBM added 1.3 and CVS added 1.2. This is equivalent to a total contribution of 5.5% points from just three stocks.
In contrast, within the dividend composite index, Philip Morris was also the biggest contributor, but due to the small index weight, he added just 0.7 points. The biggest contributors then added 0.4 points on Microsoft MSFT and JPMorgan Chase JPM, which added 0.7 points, bringing the total contributions from the three stocks to 1.8% points.
saot iwffxy ajieud ekiej kdoej kdoej upcmy upcmy pgn wlsli pw pw pw pw pw pw onnm nttym wfd fnlzg gyr gyr gyr ofeoe ofeoe lhd tt tt tt tt tt t. jooftgow ybbkcl ovud ish fksh cul w bpcdf v ipcdqg p ip ipkqh hbh fqfwsxa xdtc thy snqy snqsa hy to vgwqqqql mvtl mvtl mvtd vzgtf iyhvpjc iyhvp btamft bcdca zq andhl hght gbout gbouz ble gbouz ll of njet bcofsvb bcofsvb ubbvgglx kx gpvar l gjk gi to wcspz ccspz sysm xhibmpk eihnl yhy yyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy wsstt lmurq lm od lm od lm od mp mpk mpk
