Best Dividend Stocks to Buy Right Now for Passive Income

There has been a move out of large-cap growth stocks into other asset classes, and one of the major beneficiaries has been mid caps.

Mid-cap stocks are generally not as expensive as large caps and are viewed as more stable than small caps, giving them a better growth profile than both, particularly as interest rates are expected to decline.

So far this year, the S&P 400 mid-cap index is up about 1%, while the S&P 500 (SNPINDEX: ^GSPC) is down about 4% and the Russell 2000 is little changed (as of March 19).

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Another area that is seeing investor interest is dividend stocks. The Dow Jones US Dividend 100 Index, which includes large- and mid-cap dividend stocks, is up about 10% in 2026, topping the major indexes.

With mounting doubts about the long-term performance of large-cap stocks this year, and perhaps beyond, mid-cap and dividend stocks could be two sweet spots for the markets right now.

Here are two excellent mid-cap dividend stocks for investors looking to switch out of large caps.

1. Main Street Capital

Main Street Capital (NYSE: MAIN) is a top-quality dividend stock that delivers high-yield passive income monthly. It's a business development company, or BDC, which is required by law to distribute 90% of its income in dividends in exchange for certain tax breaks.

As a BDC, Main Street Capital provides funding and loans as well as debt services for smaller companies with annual revenue up to about $500 million. Currently, it has an investment portfolio of roughly 200 companies.

It is one of a relatively few companies that pays out a monthly dividend -- so investors get 12 payouts per year.

It is a fantastic dividend stock with a yield of 5.7%, which is almost five times higher than the S&P 500 average dividend. It is also consistent, which is somewhat rare for BDCs, as they are often prone to fluctuating payouts based on macroeconomic conditions in their industries. Main Street Capital is an outlier, increasing its dividend for 18 years in a row.

It has also provided investors with solid returns over the years. During the past 10 years, it has had an average annualized return of 6.4%, which is not bad for a dividend stock. But when you reinvest the dividend, the 10-year annualized return jumps to 14.2%, which tops the S&P 500's 12.4% return and beats the S&P 400 over that period.

2. OneMain Holdings

OneMain Holdings (NYSE: OMF) is another excellent mid-cap dividend stock option. It pays a ridiculously high yield of 8.4% and has consistently increased its dividend for six straight years.

OneMain is a consumer credit company that provides loans to non-prime borrowers. In this uncertain market with rising defaults and charge-offs, traditional banks are tightening their lending standards, which opens up opportunities for OneMain as more consumers find its loans more accessible.

Wall Street analysts see high upside for the stock, and 63% rate it as a buy with a one-year median price target of $70.50 per share. That would suggest a 40% return for the stock during the next 12 months.

The dividend itself seems to be in good shape. OneMain has a payout ratio of 62%, which indicates it has plenty of capital to keep raising its dividend. At the end of 2025, it had $914 million in cash and cash equivalents, roughly twice what it had at the end of 2024.

Further, the company focuses on more conservative underwriting for its loans, so it expects to keep its net charge-off rates roughly the same as they were in 2025. This will obviously be something to watch closely. If the economy really tanks into a recession or slow-growth scenario, it could ratchet up the risk. But the high dividend still looks well protected, even if the shares take a hit in that type of environment.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.