Dividend stocks have become a favorite investment category in the last few years as central banks have supressed interest rates. Senior citizens and people requiring a regular cash flow stream have focused on high dividend paying stocks as traditional fixed income instruments such as bonds and treasuries have very low yields. Large blue chip stocks paying a decent dividend are a good alternative to bonds because they have low default risk. Large global companies with a strong brand and competitive barriers are a good investment since their cash flows are stable. In the article below, we look at some of the best dividend stocks which are also favoured by hedge funds.
At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
Pfizer Inc. (NYSE:PFE) is one of the largest pharmaceutical companies in the world with a market value of $189 billion. This company has a long history of paying dividends and recently declared a quarterly dividend of 30 cents per share. It has steadily increased its dividends from 20 cents a quarter in 2011 to 30 cents per share now. Its annualized dividend yield is around 3.8%, making it an attractive stock for yield hungry investors. It global reach and technology strengths ensures that its cash flows will remain stable in the future. Pfizer Inc. (NYSE:PFE) operates in the healthcare industry which is more or less recession proof. In its most recent quarter, it declared revenues of $13 billion with a net income of $1.32 billion. There were 83 funds tracked by Insider Monkey long Pfizer Inc. (NYSE:PFE), down by 12% from the end of June.