Key Points

• CVS is up big so far in 2025 after a tough stretch over the past few years.

• You may not have heard of it, but VeriSign plays a critical role in the internet.

• Beverage and snack giant PepsiCo is on the move, up nearly 10% in the past month.

• 10 stocks we like better than CVS Health ›

When you're building a diversified portfolio for long-term wealth, it sometimes can be easy to ignore dividend stocks in favor of high-powered growth names in the tech sector. After all, companies like Nvidia, Palantir Technologies, and Microsoft are some of the biggest players out there, and investors flock to them to lock in market-beating gains.

I love those stocks too. But I also know that it's important to have a well-rounded portfolio which includes value stocks that represent several different sectors. These value stocks provide stable earnings, solid returns, and often a sustainable dividend that pays you back for holding them.

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I get a lot of my value stocks by holding exchange-traded funds (ETFs) because they provide instant diversification. But if you're looking to add some individual dividend stocks without breaking the bank, I'm suggesting CVS Health (NYSE: CVS), VeriSign (NASDAQ: VRSN), and PepsiCo (NASDAQ: PEP).

And you can pick up shares of each for less than $500 -- and still have some money left over.

1. CVS Health

CVS Health is one of the biggest pharmacy and retail companies in the U.S. It operates more than 9,000 pharmacies, as well as more than 1,000 walk-in clinics. The stock is on a roll this year, up 33% in 2025, which is a massive turnaround following a disappointing 2024.

In addition, CVS is a health insurer through its 2018 purchase of Aetna, giving the company another valuable revenue stream. Its healthcare segment, which includes Aetna, saw revenue of $34.8 billion in the first quarter, up from $32.2 billion a year ago.

The company's health services segment, which includes its pharmacy benefits manager Caremark, also saw a strong quarter with revenue of $43.5 billion versus $40.3 billion the previous year. The third segment, pharmacy, saw revenue increase from $28.7 billion in Q1 2024 to $31.9 billion in Q1 2025.

CVS projects full-year guidance to include revenue of at least $382.6 billion and adjusted earnings per share of $6 to $6.20. The company offers a strong dividend yield of 4.5%, making it an appealing healthcare dividend stock to hold for the long term.

2. VeriSign

VeriSign is a tech company, but you may not have heard of it. However, the company plays an indispensable role in how the internet works, which makes it a great long-term play for income investors looking for a stable stock.

This company provides domain name registry services and internet infrastructure. In short, it is the exclusive registrar for websites that include the .com and .net suffix, and it provides processing services for many other domains as well.

VeriSign says it handles 428.1 billion domain name system queries each day. That gives it a massive competitive moat -- nobody is going to come around and take the business, so you can be assured that the company's going to be around and profitable for a long time. Revenue in the second quarter was $409.9 million, up nearly 6% from a year ago. Earnings were $2.21 per share, up from $2.01 per share last year.

The stock doesn't offer the biggest dividend -- currently, it's only about 1%. But considering the stability this company has, plus its market-beating 34% gain in 2025, I'll take it all day as a solid long-term dividend stock.

3. PepsiCo

PepsiCo is on this list because of its solid year-to-date performance, its dividend, and its role in the market. The company is a consumer staples stock, as it makes its namesake Pepsi soda, as well as Frito-Lay snacks, Quaker oatmeal, and Gatorade sports drinks, among other products. I'll also look for a solid consumer staples stock when I'm looking for stocks to hold for a long period because they tend to be more recession-proof than a consumer discretionary stock.

Currently, PepsiCo is off a bit, dropping 5% in 2025 although it's gained nearly 10% in the last month as the company unveiled a plan to cut costs and promote healthier snack options. Its revenue in the second quarter was a solid $22.5 billion, down from $22.7 billion a year ago. But its operating profit boomed to $4.04 billion, up from $1.78 billion, and EPS of $2.23 was much better than the $0.92 per share the company earned in the second quarter of 2024.

Pepsi may not be beating the market like CVS or VeriSign, but it's a stock that is showing signs of life. Coupled with a strong 4% dividend yield, PepsiCo is a very appealing dividend stock in the consumer staples sector.

Should you invest $1,000 in CVS Health right now?

Before you buy stock in CVS Health, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CVS Health wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $625,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,257!*

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*Stock Advisor returns as of July 29, 2025

Patrick Sanders has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends Microsoft, Nvidia, Palantir Technologies, and VeriSign. The Motley Fool recommends CVS Health and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Quantum computing stocks have been on a tear this year, despite the technology's nascent scale and still speculative nature.

• Unlike the broader artificial intelligence (AI) theme, many popular quantum computing stocks are small companies with limited traction.

• While it can be tempting to follow the momentum, several quantum computing stocks boast valuation multiples that echo those seen during prior stock market bubbles.

• 10 stocks we like better than IonQ ›

This year has been tough for investors, particularly those who flock toward growth stocks. Just about every major industry has been impacted in some form or fashion by President Donald Trump's new tariff policies.

While the broader implications of these import taxes are still unfolding, one sector that has faced abnormally large headwinds is technology. For the first time in nearly three years, investing in the artificial intelligence (AI) market hasn't necessarily resulted in outsized gains.

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Nevertheless, one pocket of the AI realm that has managed to circumvent the panic-selling this year is quantum computing. As of this writing (July 17), the Defiance Quantum ETF has gained 17% so far this year -- roughly double the returns seen in the S&P 500 and Nasdaq Composite.

With quantum computing stocks trouncing the broader market, now may be an appropriate time to assess valuations in the sector and compare them to prior periods of heightened enthusiasm.

What is a stock market bubble, and what are some examples?

One of the most basic mistakes investors make is assessing a company's valuation based on its stock price. In other words, if the stock price is low, an investor might mistakenly view the company as "cheap" (and vice versa).

Smart investors understand that there are far more parameters than the share price that help determine a company's valuation. Underlying financial metrics, such as revenue, gross margins, profitability, free cash flow, cash, and debt, should all play a factor in assessing the health of a business.

From there, more sophisticated analysis requires investors to benchmark these figures and their growth rates against a set of peers to get a better sense of how the business in question compares to the broader competitive landscape.

Many investors do not take the time to perform the due diligence exercise above and instead choose to follow broader momentum. Unfortunately, this can lead to abnormally inflated stock prices -- those that are incongruent with the underlying fundamentals of the business.

Generally speaking, reality begins to set in and these companies are unable to sustain their overstretched valuations, eventually leading to harsh, dramatic sell-offs. This phenomenon is known as a stock market bubble.

In the charts below, I've illustrated some valuation trends across two notable stock market bubbles.

AMZN PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

The chart above illustrates the price-to-sales (P/S) ratios for a number of high-flying internet stocks during the dot-com bubble of the late 1990s. As the trends above make clear, each of the companies in the peer set above trades at much more normalized valuation multiples today when compared to their peaks during the internet boom.

ZM PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

Investors witnessed a similar theme in overstretched valuations during the peak days of the COVID-19 pandemic. Companies such as Zoom Communications, Wayfair, and Peloton witnessed abnormal demand for their respective product offerings as remote work became the norm.

As the trends seen above demonstrate, however, these growth tailwinds were not permanent. Today, none of these COVID stocks are seen as compelling growth opportunities, and their cratering valuations are a sobering reminder of the aftermath of bubbles bursting.

How do quantum computing stocks compare to the valuations above?

Over the last year, IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing (NASDAQ: QUBT) have emerged as popular names fueling the quantum computing movement.

IONQ PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

With a P/S multiple of over 5,700, the tiny Quantum Computing business is the clear outlier in the quantum computing cohort illustrated above. Even so, Rigetti, IonQ, and D-Wave each boast P/S ratios that are either considerably higher or in line with the darlings of the dot-com and COVID bubbles.

Are we in a quantum computing stock bubble?

The quantum computing stocks referenced above are highly speculative -- arguably even more so than the highfliers during the internet era. Unlike then, today's technology behemoths, such as Amazon, Microsoft, eBay, and Cisco, have evolved into sophisticated platform businesses with diversified ecosystems.

This provides them with the scale and financial flexibility to explore emerging fields such as quantum computing. Smaller players, such as IonQ, Rigetti, D-Wave, and Quantum Computing, currently face intense competition from big tech -- something the dot-com businesses did not.

Given the valuation analyses explored above, many popular quantum computing stocks are clearly trading at abnormally high and historically unsustainable valuation levels. For these reasons, I think companies such as IonQ, Rigetti, D-Wave, and Quantum Computing have entered bubble territory.

With that said, many big tech companies in the "Magnificent Seven" are exploring quantum applications as well. Many of these companies trade for much more reasonable valuations. While I am not convinced the broader quantum computing opportunity is necessarily in a bubble, I believe investors need to be cautious and thoughtful when selecting which quantum computing stocks to invest in.

And the best choices will rarely be high-flying specialists with big dreams and small revenue streams.

Should you invest $1,000 in IonQ right now?

Before you buy stock in IonQ, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and IonQ wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon, Cisco Systems, Microsoft, Peloton Interactive, VeriSign, Zoom Communications, and eBay. The Motley Fool recommends Wayfair and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• BYD isn't a typical Buffett stock, but has qualities that fit his philosophy.

• VeriSign makes the internet function as we know it today.

• Buffett loves Coca-Cola for the soda as well as as the company.

Warren Buffett is one of the most legendary figures on Wall Street. The longtime CEO of Berkshire Hathaway turned the company into a dominant conglomerate that has its hands in everything, including real estate, insurance, energy, consumer goods, and healthcare.

Under Buffett's leadership, Berkshire's portfolio gained 5,502,284% from 1965 to the end of 2024. By way of comparison, the S&P 500 gained 39,054%, including dividends, in that same period. Now 94 and planning a well-deserved retirement at the end of the year, Buffett undoubtedly belongs on the Mount Rushmore of investors.

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Buffett's philosophy involves buying quality businesses that have distinct competitive advantages. He invests for the long term, often holding stocks for decades, and tends to prefer companies with strong management, reliable earnings, and a consistent dividend.

Now that the calendar has turned to July and we're halfway through the year, this is a good time to take a cue from the Oracle of Omaha himself and choose stocks that are held in Buffett's portfolio. If you're looking for a new investment, you can't go wrong with these three Warren Buffett stocks: BYD (OTC: BYDDY), VeriSign (NASDAQ: VRSN), and Coca-Cola (NYSE: KO).

BYD: An outlier that fits the Buffett mold

On the surface, BYD doesn't look like a Buffett stock. The Chinese company, which got its start in 1995 as a rechargeable battery maker, now is one of the world's biggest manufacturers of electric vehicles (EVs). It also works in rail transit, new energy, electronics, and power storage. Berkshire's stake in BYD is more than 162 million shares, valued at $2.5 billion.

Berkshire actually got involved with BYD because of the influence of Charlie Munger, the longtime Buffett confidant and late Berkshire Hathaway vice chairman. But the company fits with Berkshire's portfolio because of the key position it has in the Chinese EV market. BYD is by far the biggest supplier of EVs in China, delivering 3.52 million vehicles in 2024. The company in second place, Wuling, had just 673,279 deliveries.

Earnings for the first quarter showed revenue of $23.77 billion, up 36% from a year ago. Profits totaled $1.27 billion, up 100% from the same quarter a year ago.

VeriSign makes the internet functional

VeriSign is one of those businesses that you may not know a lot about, but as it turns out, you use its products every day. The Virginia-based company provides domain name registry services and internet infrastructure -- in short, it's the exclusive registrar for websites that end in .com or .net.

The company says it provides support for 169.8 million domain names that end with .com or .net, and processes more than 428.1 billion domain name system (DNS) queries each day. The scope of its work, and its massive competitive moat are exactly the qualities that Buffett looks for when choosing a stock.

First-quarter financials included revenue of $402 million, up 4.7% from a year ago. Net income was $199 million and $2.10 per year, compared to $194 million and $1.92 per share in the first quarter of 2024. Buffett feels strongly enough about VeriSign that Berkshire owns 14.3% of the company, holding nearly 13.3 million shares.

Coca-Cola is a longtime Buffett favorite

Buffett is passionate about Coca-Cola, both as a beverage and as a company. He famously downs five cans of Coca-Cola per day, and once told Fortune magazine that he gets 25% of his daily calories from the carbonated drink.

But Coca-Cola does a lot more than its namesake soda. As people started looking for healthier options, Coca-Cola expanded its offerings to include bottled water, sports drinks, tea, and juices. It's even started a line of alcoholic beverages.

Earnings for the first quarter showed revenue down 2%, to $11.1 billion. But on the plus side, the company managed to improve its operating margin to 32.9% from just 18.9% in the first quarter of 2024. And earnings per share grew 5%, to $0.77 per share.

Berkshire owns 400 million shares of Coca-Cola stock, representing a 9.3% share. Its stake is worth a whopping $28.45 billion.

Should you invest $1,000 in BYD Company right now?

Before you buy stock in BYD Company, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BYD Company wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and VeriSign. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.

VeriSign (NASDAQ: VRSN) shares took off Friday morning after the company released first-quarter earnings and declared a dividend for the first time. Its solid results also allowed the company to raise revenue guidance for the full year.

Investors jumped into what has been one of the big stock market winners so far this year. Shares jumped 9.3% higher as of 11:35 a.m. ET, giving the stock a gain of 33% year to date.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

VeriSign is a big Warren Buffett holding

The initiation of a quarterly cash dividend surely made shareholders happy, too. That group of investors includes Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).

VeriSign isn't what most investors would picture as a Buffett holding. The company manages internet domain names and provides critical internet infrastructure for managing and maintaining security. Buffett typically steers clear of technology stocks, but Berkshire has owned VeriSign for more than a decade, and it added to its VeriSign holding in the fourth quarter. That holding was valued at about $2.75 billion at the end of Q4, putting VeriSign just out of Berkshire's 10 largest holdings.

Shareholder-friendly moves

Buffett likely continues to be happy with VeriSign's business. The company saw both revenue and operating income grow almost 5% year over year. It raised 2025's full-year guidance for both of those metrics as well.

VeriSign also declared a cash dividend of $0.77 per share, giving the stock a forward dividend yield of about 1.1%. It also repurchased 1 million shares at an average price of $230 per share. Those are signs of a company with strong free cash flow. The share repurchases should continue, as VeriSign still had almost $800 million authorized for that purpose as of the end of the quarter.

This is a company that has been delivering consistent financial results with strong cash flow. And note that it should feel minimal impacts from the current tariff uncertainty. It's not immune to currency fluctuations and economic slowdowns, but it looks to be a good stock to own right now.

Should you invest $1,000 in VeriSign right now?

Before you buy stock in VeriSign, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and VeriSign wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Howard Smith has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway and VeriSign. The Motley Fool has a disclosure policy.