These 3 Dividend Stocks Yield Less Than 10-Year Treasuries Over 5%. Here's Why They Are Better Buys Anyway.

With 10-year Treasury yields above 5.2%, it's fair to ask why anyone would buy dividend stocks that pay half as much. But a Treasury pays the same fixed coupon until maturity, whereas a dividend can rise year after year. Plus, the stock itself could appreciate over the years.

That's why I'm looking at three dividend stocks that pay less than the 5.2% 10-year Treasury yield today, but are still quality investments trading well below their high target prices.

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First up is a name every American already knows.

CVS Health's nationwide reach powers a bigger healthcare bet

Americans will be intimately familiar with CVS Health (NYSE: CVS). It's the corner store that has just about everything: a pharmacist, a flu shot station, and even a phone charger if you're in a pinch. The company has over 9,000 stores in the U.S., mostly in busy cities, strip malls, or other easily accessible locations.

This reach, this massive footprint, is a big part of the investment case. Its stores and large product portfolio provide a steady revenue stream that it uses to fund its much larger healthcare operations, including pharmacy services, insurance, and prescription delivery.

And business has been good. CVS reported strong second-quarter results for 2026, beating analysts' expectations on both adjusted earnings per share (EPS) and revenue. The company also pays a $2.66-per-share dividend, which translates to roughly a 3% yield.

Wall Street analysts like the stock. A consensus among 24 analysts rates it a strong buy, with the high target price suggesting aproximately 45% upside over the next year.

But CVS isn't the only healthcare name worth a look.

Abbott's dividend history keeps growing despite recent setbacks

High Treasury yields can look attractive, but they're often temporary. Meanwhile, a growing dividend from a reliable company is something investors can potentially build on for years.

Abbott Laboratories (NYSE: ABT) has built exactly that kind of track record. The company has paid over 400 quarterly dividends and increased its payouts for 54 consecutive years. Right now, the company pays $2.52 per share, which translates to a yield of about 2.5%, well below the yield on 10-year Treasury bills these days. But over the last five years, Abbott has increased its dividend by 64%.

The underlying business is also still growing. Abbott beat its Q2 estimates and raised full-year EPS guidance, and management also expects growth to pick up in the second half.

Analysts also like the stock, assigning a consensus strong buy rating with up to 43% upside potential, citing its high target price.

There's a third healthcare giant worth considering, too.

UnitedHealth's size gives income investors more upside potential

UnitedHealth (NYSE: UNH) is the largest health insurer in the country, covering tens of millions of Americans through employer, Medicare, and Medicaid plans under its UnitedHealthcare arm. Its Optum division runs one of the biggest pharmacy benefit managers (OptumRx), employs or is affiliated with a large network of doctors, and sells data and technology services to the rest of the healthcare system.

UnitedHealth has increased its dividends for the last 17 consecutive years. So even though the stock's been relatively flat, up about 3% over the last five years, investors still got something out of the deal.

But how much, exactly? Well, the company pays a $9.28 forward dividend, which translates to about a 2.4% yield. Meanwhile, a consensus among 26 analysts maintains a strong buy rating for the stock, with a high target price implying 42% potential upside.

So which of these three is the best buy?

Which of these three dividend plays fits investors best?

Treasuries offer certainty, but their payout never grows. CVS, Abbott, and UnitedHealth all yield less than a 10-year note today, yet each brings what a Treasury can't: a growing dividend and real upside if shares move toward Wall Street's highest targets.

Of the three, UnitedHealth is a proven cash generator whose stock appears fairly valued, with dividend growth and analyst targets suggesting patient investors could still be rewarded. Granted, none of them pays what the Treasury pays today, but if their dividends keep climbing and shares close the gap to those price targets, the total return could beat a 5% note several times over.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories. The Motley Fool recommends CVS Health and UnitedHealth Group. The Motley Fool has a disclosure policy.