• Dividend stocks are responsible for driving much of the returns in the S&P 500 Index over the years. 
• We’ve uncovered a trio of dividend stocks that could be easy to overlook.
• Check out our latest report, “Two Dividend Legends to Hold Forever.”

If you’re considering investing in dividend stocks, you’ll find that there are many reasons to do so, not least the steady passive income they deliver on top of long-term capital appreciation. Dividend stocks have been a major component in the returns investors have earned for decades, especially when the distributions are reinvested. Between 1960 and 2024, more than three-quarters (85%) of the “cumulative total return of the S&P 500 Index” was a direct result of reinvested dividends and the compounding effect, according to Hartford Funds.

There’s no shortage of dividend stocks to choose from, and we’ve uncovered three from various sectors of the economy that are outside of the box for most investors. Despite their differences, they’ve all got something in common: paying steady dividends for at least several years while prioritizing shareholder value in changing market cycles. 

Winmark Corp 

• Quarterly Dividend Amount: $0.90
• Dividend Yield: 1.08%

While Winmark (WINA), a resale company operating in the circular economy, might not be on every investor’s radar, it’s been around for more than 30 years. As a small business franchisor of resale retail stores across North America, Winmark seeks to minimize waste by giving local communities a simplified way of purchasing items and preventing products with more years in them from ending up in landfills.

The company boasts a portfolio of familiar brands like Plato’s Closet, Once Upon a Child, Play It Again Sports, Style Encore and Music Go Round, with over 1,300 franchises in operation. As a resale retailer, Winmark has a heightened focus on sustainability and franchises that commit to using locally sourced, quality, lightly-used products in areas like sporting equipment, baby clothing, toys, music gear and more. Most recently, the company has partnered with Impex Fitness to extend the life of fitness gear and offer value to consumers looking to create a home gym experience. 

Winmark just came off a Q1 performance that CEO Brett D. Heffes described as “adequate,” as there was neither anything spectacular nor overly disappointing to report, including cash flow that was moderately below year-ago levels. With a 20% year-to-date decline, the stock may offer investors a buying opportunity.

Over the long term, Winmark’s stock price has performed much better, roughly doubling its value in the past five-year period. Winmark remains focused on returning value to shareholders, making it a habit to lift the dividend regularly, including its most recent hike of $0.10 to $0.90 per share in early Q2. Dividend investors who prefer to buy stocks that reflect their values on causes like sustainability might want to consider Winmark. 

If an investor allocated $1,000 to WINA stock five years ago and reinvested their dividends to buy additional shares, they would have generated average annual returns of 17.7% for a final value of approximately $2,264. 

Crescent Capital

• Base Quarterly Dividend Amount:  $0.42 
• Dividend Yield:  9.37%

Crescent Capital (Nasdaq: CCAP) operates in financing services as an alternative asset manager, issuing and investing in the debt of U.S. middle-market companies. The company, which is headquartered in Los Angeles, oversees a portfolio of over $40 billion in assets under management. Crescent operates in the high-yield and below investment grade securities markets, where there are plenty of opportunities for a seasoned team in a challenging capital markets environment. 

Crescent pays a quarterly dividend of $0.42 per share in addition to frequent special dividends. Similar to Winmark, Crescent Capital has been around for over 30 years, but it might not be widely known. The stock is up approximately 8.5% year-to-date and is hovering near its 52-week high. 

Crescent recently increased its regular cash dividend by $0.01 to $0.42 per share while also declaring a supplemental cash dividend of $0.11 per share. 

If an investor allocated $1,000 to CCAP five years ago and reinvested their dividends, they would have nearly doubled their money with an average annual return of 15.5% and a final value of roughly $1,873. 

Essential Properties Realty Trust

• Quarterly Dividend Amount: $0.29
• Dividend Yield: 4.23% 

Rounding out our top three unheard of dividend stocks to buy is Essential Properties Realty Trust (NYSE: EPRT), which technically is a real estate investment trust (REIT). The Princeton, N.J.-based company specializes in single-tenant properties that it then leases to middle-market firms.

In early June, Essential Properties raised its quarterly dividend by 1.8% to $0.29 per share, amounting to $1.16 on an annualized basis. The stock is trading near its 52-week high at almost $28 per share and is up 7.8% year to date. 

Essential Properties is invested in close to 80 properties across almost $250 million, its highest since inception, which CEO Pete Mavoides attributes to “favorable competitive dynamics” and the company’s “relationship-driven sale leaseback platform.” After increasing its Q1 adjusted funds from operations (AFFO) by 5% year over year to $0.42, the company lifted the low end of its 2024 AFFO guidance. Essential Properties boasts what management describes as a “well capitalized balance sheet and a value proposition of providing reliable growth capital to middle market companies and our targeted industries.” 

Investors who directed $1,000 into EPRT five years ago and reinvested dividends would have generated annual returns of  approximately 10% for a final value of $1,636.

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