Investment Opportunities: Three High-Yield Growth Shares to Expand Your Portfolio in August
News Article: Top Dividend Stocks for August 2025 Recommended by Motley Fool
In a recent recommendation, financial advice firm Motley Fool has highlighted three top dividend stocks for August 2025. The selected companies, IBM, Waste Management (WM), and Delta Air Lines, offer attractive dividend yields, solid financial performance, and resilience in their respective industries.
IBM, a century-old company, is considered a growth stock due to its strong exposure to Artificial Intelligence (AI). The tech giant has the most generative AI patents among American companies, according to research from The Motley Fool. IBM's AI applications are expected to grow at a steeper rate than previously thought, making it an intriguing investment opportunity. IBM offers an attractive 2.6% forward-yielding dividend and a strong generative-AI book of business, which represented $7.5 billion from 2023 to date. However, it's worth noting that IBM's five-year average payout ratio of 156% may concern some investors, but its strong free cash flow covers it.
WM, a leading waste management company, is another top dividend pick for August. Despite having 22 consecutive years of raising its dividend, WM's stock yields 1.5%. The company completed the acquisition of Stericycle in November 2024, giving it a play on the growing healthcare waste market. WM has an integrated business model covering the entire waste management value chain, including trash and recycling collection, transportation, and processing. In the second quarter, WM reported a 29.9% total company margin under adjusted operating EBITDA. Over the last five-year and 10-year periods, WM has outperformed the S&P 500.
Delta Air Lines, with a current yield of 1.4%, is the third company on Motley Fool's list. Delta is reducing its earnings cyclicality through a focus on growing more-sustainable premium cabin revenue and loyalty programs. Remuneration from co-brand credit cards with American Express helps Delta's earnings stability. The airline's long-term trend line is heading upward due to its favorable position to deal with rising airport costs and a focus on reducing earnings cyclicality.
The S&P 500, after a recovery from a steep sell-off in April, is expected to have an above-average year in 2025. The index has had back-to-back gains of more than 20% in 2023 and 2024. These companies, with their consistent dividend payments, growth potential, and defensive business models, can offer investors a balance between income and growth opportunities, making them attractive for income-focused investors.
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