In this article, we will discuss the 12 best dividend stocks to invest in. You can also skip the detailed analysis of high-dividend companies and their performance over the years and read directly. 5 Top Quality Dividend Stocks to Invest in.
In a volatile stock market, income stocks play an important role. While tech stocks seemed to gain traction last year, that doesn't necessarily signal the decline of dividend stocks, which have long held appeal. Looking ahead to 2024, the outlook for the stock and bond markets will fluctuate regularly based on economic updates, Federal Reserve statements, and changes in interest rate expectations. Investors initially expected the Federal Reserve to cut interest rates multiple times this year, with the first expected in March. However, after a series of positive economic indicators, the Fed indicated that a rate cut in March is unlikely. As a result, investors are adjusting the valuations of stocks and bonds and waiting for interest rates to start falling later than previously expected. In times of uncertainty, investors are advised to focus on dividend stocks. These stocks typically offer good value and stable returns, especially in sectors where stock prices are expected to rise.
Analysts' preference for dividend stocks is not a recent trend. It is mainly based on the past performance of these stocks. Companies that have consistently increased dividends over the long term have historically provided high returns and have proven to be reliable investments. These stocks have been particularly resilient during periods of high inflation. For example, the S&P 500 High Dividend Growth Index tracks S&P 500 constituents known for consistent or increasing dividends and high expected dividend yield growth, with dividends increasing at an annual rate of 13.8% from 2010 to 2022. It has been reported that. S&P Dow Jones Index. This growth rate is higher than the long-term inflation rate in the United States, even during the recent spike in inflation. The report also notes that historical data comparing the performance of the S&P 500 High Dividend Growth Index to the S&P 500 shows that the index exhibits moderately defensive characteristics with a downside capture rate of 94.5%. did. Additionally, over time, this index has typically earned 96% of the market's returns when the market is trending up.
As mentioned above, dividend stocks took a backseat in the tech rally of 2023, but reliable dividend-paying companies are poised for a strong comeback. Analysts are optimistic that investors will recognize the strength of these stocks this year. Lord Abbett strategists say some of the stocks they consider to be high-quality are dividend growth stocks, or companies with a long history of consistently raising dividends. They believe that companies with strong balance sheets, strong cash flows and reliable dividends are well-positioned to sustain performance as the economic cycle shows signs of slowing. .
Walmart Inc. (NYSE:WMT), Johnson & Johnson Inc. (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) are some of the best dividend stocks with decades of consecutive dividend growth. In this article, we'll take a closer look at some blue-chip dividend stocks.
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Our methodology:
For this list, we scanned Insider Monkey's database of 910 hedge funds as of Q3 2023 to identify blue-chip dividend companies with strong balance sheets. From this initial selection, we narrowed down our selection to include only companies that have consistently increased their dividends for 25 years or more and currently offer a yield above 3% as of February 13th. Our purpose in focusing on these companies is to highlight their excellence and long-standing dedication to returning profits to shareholders. Stocks are ranked in ascending order of hedge funds that own the stock. The top 10 consensus stocks selected by hedge funds have outperformed the S&P 500 index by more than 140 percentage points over the past 10 years (Please see here for the detail).
12. Realty Income Corporation (NYSE:O)
Number of hedge fund holders: 23 people
Dividend yield as of February 13: 5.98%
Realty Income Corporation (NYSE:O) is an American real estate investment trust company that invests primarily in commercial real estate. Specifically, it focuses on retail and commercial real estate, which it leases to tenants on long-term rental agreements. The company pays a monthly dividend to its shareholders, making it one of the highest quality dividend stocks on our list. Additionally, the company has increased its dividend for the past 104 consecutive quarters. The company currently pays a monthly dividend of $0.2565 per share as of February 13th, giving it a dividend yield of 5.98%.
At the end of Q3 2023, Insider Monkey's database reported that 23 hedge funds held shares in Realty Income Corporation (NYSE:O), compared to 24 in the previous quarter. there were. These stakes total approximately $150 million.
11. Consolidated Edison, Inc. (NYSE:ED)
Number of hedge fund holders: 27 people
Dividend yield as of February 13: 3.80%
Consolidated Edison, Inc. (NYSE:ED) is a diversified energy company operating primarily in the regulated electric, gas, and steam sectors. The company is responsible for supplying electricity and gas to millions of customers within its service territory, maintaining the infrastructure necessary to reliably provide these services, and meeting customer needs.
On January 18, Consolidated Edison Company (NYSE:ED) announced a quarterly dividend of $0.83 per share, up from the previous dividend of $0.81 per share. This increase extends the company's dividend growth streak to 50 years, making ED one of the highest quality dividend stocks to invest in. The stock's dividend yield as of February 13 was 3.80%.
As of the end of Q3 2023, 27 hedge funds in Insider Monkey's database held shares in Consolidated Edison Company (NYSE:ED), down from 30 in the previous quarter. did. In total, these stakes are worth more than $350.3 million. AQR Capital Management, with approximately 1 million shares, became the company's major shareholder in the third quarter.
10. Air Products and Chemicals Co. (NYSE:APD)
Number of hedge fund holders: 43 people
Dividend yield as of February 13: 3.22%
Air Products and Chemicals, Inc. (NYSE:APD) is a global industrial gas company that provides atmospheric, process and specialty gases, performance materials, equipment and technology. The company announced on January 25th that it will increase its quarterly dividend by 1.1% to $1.77 per share. This marks the company's 42nd consecutive annual dividend increase. With a dividend yield of 3.22% as of February 13th, APD is one of the highest quality dividend stocks to invest in.
At the end of September 2023, 43 hedge funds tracked by Insider Monkey held shares of Air Products & Chemicals, Inc. (NYSE:APD), the same as last quarter. The total value of these stakes is over $952.3 million.
9. International Business Machines Corporation (NYSE:IBM)
Number of hedge fund holders: 53 people
Dividend yield as of February 13: 3.62%
International Business Machines Corporation (NYSE:IBM) has increased its dividend for 28 consecutive years, making it next on our list of best-quality dividend stocks to invest in. The multinational technology company currently offers a quarterly dividend of $1.66 per share, yielding a dividend yield of 3.62% as of February 13th.
The number of hedge funds in Insider Monkey's database that own shares in International Business Machines Corporation (NYSE:IBM) rose to 53 in Q3 2023 from 51 in the previous quarter. The total value of these stakes is approximately $843 million. Among these hedge funds, Marshall Weiss LLP was the company's major shareholder in the third quarter.
8. 3M Company (NYSE:MMM)
Number of hedge fund holders: 54 people
Dividend yield as of February 13: 6.53%
3M Company (NYSE:MMM) is a Minnesota-based multinational conglomerate company that operates in a variety of industries and is known for its diverse products. The company recently announced its 66th consecutive annual dividend increase, making MMM one of the highest quality dividend stocks to invest in. The company currently offers a quarterly dividend of $1.51 per share, with a dividend yield of 6.53% as of February 13th. .
3M Company (NYSE:MMM) ended Q3 2023 with 54 hedge fund positions, up from 49 in the previous quarter, according to Insider Monkey's database. The total value of the stocks held by these hedge funds is over $818.6 million.
7. The Coca-Cola Company (NYSE:KO)
Number of hedge fund holders: 57 people
Dividend yield as of February 13: 3.08%
The Coca-Cola Company (NYSE:KO) is an American beverage company engaged in the manufacturing, marketing, and distribution of non-alcoholic beverages. The company boasts a track record of consistent dividend growth over his 61 years, with quarterly dividends of $0.61 per share. The dividend yield of the company's stock as of February 13 was 3.08%.
According to Insider Monkey's database, The Coca-Cola Company (NYSE:KO) was in 57 hedge fund portfolios at the end of Q3 2023, down from 61 stocks in the previous quarter. The consolidated value of the stocks held by these hedge funds is over $25 billion. Warren Buffett's Berkshire Hathaway held the largest stake in the company, worth more than $22.3 billion.
6. NextEra Energy, Inc. (NYSE:NEE)
Number of hedge fund holders: 58 people
Dividend yield as of February 13: 3.36%
NextEra Energy, Inc. (NYSE:NEE) ranks #6 on our list of the best dividend stocks to invest in. This renewable energy company has increased its dividend for his 27th consecutive year, and his quarterly dividend is $0.4675 per share. The dividend yield as of February 13th is 3.36%.
According to Insider Monkey's Q3 2023 database, 58 hedge funds held shares in NextEra Energy, Inc. (NYSE:NEE), down slightly from 59 in the previous quarter. The total value of these shares is more than $1.4 billion.
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Disclosure. none. 12 High quality dividend stocks to invest in Originally published on Insider Monkey.
