In this article we will be taking a look at the 10 best buy and hold forever dividend stocks.
Income or dividend investing is a strategy that is reputable for its utility and usefulness. This form of investing has also become more popular in light of bond yields and other fixed-income investments offering relatively low profits, according to a Jefferson Research report published in 2017.
The report offers an insight into the benefits of investing in various dividend stocks, like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO). Such stocks offer an immediate cash flow to investors until they are sold, and their dividend payments are also subject to increase over the years. As such, they also offer protection in times of inflation and are individually less risky investments. Additionally, these stocks have historically outperformed the market and bonds.
To support the above claims, the report gives insight into some empirical evidence. In 2013, Goldman Sachs White Paper “Why Dividend Growth Matters” showed that the annual return of dividend growers and initiators was 9.6% compared to 7.1% for the S&P 500. Additionally, the volatility of the former was 16.2%, compared to 18% for the latter, representing the reduced risk of dividend stocks. Finally, from 1926 to 2010, it has also been noted that 85% to 90% of the S&P 500’s returns were from dividends alone.
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Our Methodology:
These stocks mentioned in this article are considered good buy and hold forever options because they have records of consistent dividend increases, and positive news surrounding them for future prospects, all of which we have mentioned below. We have also mentioned analyst ratings for the stocks selected, ensuring they have mostly positive ratings. Additionally, the price gains of the stocks listed below, as of mid-March 2022, have also been mentioned where applicable. Finally, the stocks are ranked on the basis of their dividend yields, from the lowest to the highest dividend yield.
Best Buy And Hold Forever Dividend Stocks
10. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 67
Dividend Yield: 2.3%
The Procter & Gamble Company (NYSE:PG) is a giant in the consumer staples industry, being the company behind many big consumer brands, such as Gillette and Pampers. The company has raised its dividend consecutively for the past 65 years, making it a reputable Dividend King.
Deutsche Bank analyst Steve Powers holds a Buy rating on The Procter & Gamble Company (NYSE:PG) as of March 2022.
In the fiscal second quarter of 2022, the company had an EPS of $1.66, beating estimates by $0.01. Its revenue was $20.9 billion, also beating estimates by $617.4 million. The Procter & Gamble Company (NYSE:PG) has also gained 3.8% in the past six months.
The number of hedge funds holding shares in The Procter & Gamble Company (NYSE:PG) in the fourth quarter of 2021 was 67, with a total stake value of $6.6 billion. In comparison, 69 hedge funds held stakes in the company in the previous quarter, with a total stake value of $6.4 billion.
The Procter & Gamble Company (NYSE:PG), like Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO), is among the most reliable dividend stocks to buy in 2022 because of its history of dividend increases.
9. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Dividend Yield: 2.5%
Johnson & Johnson (NYSE:JNJ) is a healthcare company that has been operational for over a century. It offers some of the most popular medicinal products such as Tylenol and Band-Aids, alongside more complex drugs and medical devices. It is one of the best buy and hold forever dividend stocks to invest in, as showcased by the large number of hedge funds holding stakes in the company, and the stock’s dividend history showing dividend increases for 59 years in a row.
Lee Hambright, an analyst at Bernstein, holds an Outperform rating on Johnson & Johnson (NYSE:JNJ) shares as of this March.
Johnson & Johnson (NYSE:JNJ) had an EPS of $2.1, beating estimates by $0.01, in the fourth quarter of 2021. Its revenue was $24.8 billion, beating the previous quarter’s revenue of $23.3 billion. The stock has also gained 4.6% in the past six months and 0.8% year to date.
Out of 924 hedge funds, 83 hedge funds were long Johnson & Johnson (NYSE:JNJ) in the fourth quarter, with a total stake value of $7.4 billion. The largest stakeholder in the company was Fundsmith LLP, holding 7,219,198 shares worth over $1.2 billion.
8. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 57
Dividend Yield: 2.7%
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading company in enterprise computing, and an icon in Silicon Valley. The company has long established itself as one of the dominating forces in the tech sector. Having raised its dividend consecutively for the past decade, it is among the best buy and hold forever dividend stocks to invest in this year.
Wells Fargo analyst Aaron Rakers holds an Equal Weight rating on Cisco Systems, Inc. (NASDAQ:CSCO) shares as of this March.
This February, Cisco Systems, Inc. (NASDAQ:CSCO) announced a considerable dividend increase of 3%, alongside an additional $15 billion share buyback program. The increased dividend of $0.38 per share will be payable to shareholders on April 27. The company’s CFO, Scott Herren, commented that the dividend increase and share buyback program demonstrate Cisco Systems, Inc.’s (NASDAQ:CSCO) commitment to returning excess capital to its shareholders.
Our fourth-quarter hedge fund data shows 57 hedge funds long Cisco Systems, Inc. (NASDAQ:CSCO) in that quarter, with a total stake value of $3.4 billion.
7. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Dividend Yield: 2.9%
The Coca-Cola Company (NYSE:KO) offers a range of non-alcoholic beverages to consumers across the globe and has recently included juices, teas, and hydration products such as PowerAde and Smartwater to its long list of manufactured products. The company has raised its dividend for the past 59 years as well.
This February, Evercore ISI analyst Robert Ottenstein reiterated his Outperform rating on shares of The Coca-Cola Company (NYSE:KO).
In the same month, The Coca-Cola Company (NYSE:KO) increased its quarterly dividend by a whopping 5%, bringing it up to $0.44 per share. Additionally, the company announced that it expects to resume share repurchases this year, with net repurchases of about $500 million for 2022. Such developments make it an attractive dividend stock with lucrative future prospects.
In the fourth quarter of 2021, 70 hedge funds held stakes in The Coca-Cola Company (NYSE:KO), worth about $28.6 billion. Of these hedge funds, Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the company. The fund held 400,000,000 shares in the company, worth over $23.7 billion.
6. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 107
Dividend Yield: 2.9%
JPMorgan Chase & Co. (NYSE:JPM) is a giant in the financial sector, offering consumer and small-business banking and financial services and products. The company also offers wealth management services and other high-end services for corporate clients and other institutions. The company has raised its dividend for the past nine years in a row, making it one of the most reliable buy and hold forever dividend stocks one can buy.
UBS analyst Erika Najarian holds a Buy rating on JPMorgan Chase & Co. (NYSE:JPM) shares as of this January.
The company’s earnings history shows an EPS of $3.3, beating estimates by $0.3, and a revenue of $29.3 billion, up 0.11% year over year.
JPMorgan Chase & Co. (NYSE:JPM) had 107 hedge funds holding stakes in it in the fourth quarter. Their total stake value was $6.6 billion. Comparatively, in the previous quarter, 101 hedge funds were long the stock, with a total stake value of $5.6 billion.
Miller Value Partners, an investment management firm, mentioned JPMorgan Chase & Co. (NYSE:JPM) in its fourth-quarter 2021 investor letter. Here’s what they said:
“I remember writing about the attractiveness of JP Morgan (JPM) right before it lost about a third of its value in the third quarter of 2011 (which didn’t please some of my colleagues!). I believed JPM was a high-quality bank whose prospects were undervalued due to the overhang on the space. It made money every year through the financial crisis.
In the decade-plus since then, JPM has beaten the market nicely (+417% versus SPX +345%) despite significant headwinds for banks (S&P Financial Sector +286%) and value stocks. Low market expectations are a key ingredient to attractive long-term returns!
An earthquake after-shock metaphor helps to explain the situation. Earthquakes relieve tension in physical systems, but aftershocks are common. These aftershocks aren’t as serious as the original event because stresses have been relieved. The financial crisis alleviated tensions in the financial system as weaker players either perished or were shored up with capital. Lessons learned impacted behavior (lower risk-taking behavior and higher propensity for monetary authorities to intervene supportively), which reduced future risk.
Those realities didn’t matter in the short term, but they sure did in the long term.”
JPMorgan Chase & Co. (NYSE:JPM) is among the more popular dividend stocks hedge funds are looking at this year, like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO).
5. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 72
Dividend Yield: 3.1%
Intel Corporation (NASDAQ:INTC) is a multinational technology company, making processors for most computers, alongside a swathe of other tech-related products. The company has a focus on cloud data infrastructure products and chips as well. Having raised its dividend yield for the past 19 years, it is also one of the most secure buy and hold forever dividend stocks today.
Raymond James’ Chris Caso upgraded Intel Corporation (NASDAQ:INTC) shares from Underperform to Market Perform just this February.
The company’s EPS in the fourth quarter of 2021 was $1.1, beating estimates by $0.3. Intel Corporation (NASDAQ:INTC) also had revenue of $19.5 billion, beating estimates by $1.2 billion.
In the fourth quarter of 2021, 72 hedge funds were long Intel Corporation (NASDAQ:INTC), with a total stake value of $5.5 billion.
4. Clearway Energy, Inc. (NYSE:CWEN.A)
Number of Hedge Fund Holders: 21
Dividend Yield: 3.8%
Clearway Energy, Inc. (NYSE:CWEN.A) is a lucrative investment option for growth and income investors alike, because of its focus on renewable energy and its attractive dividend yield. The company owns and operates utility-scale wind and solar assets. The company has raised its dividend for two years so far.
Clearway Energy, Inc. (NYSE:CWEN.A) just this February reaffirmed its 2022 full-year CAFD guidance of $395 million. This guidance factors in the company’s committed growth investments, and promises a contribution of about $40 million from the Thermal Business alone.
Out of 924 hedge funds, 21 hedge funds were long Clearway Energy, Inc. (NYSE:CWEN.A) in the fourth quarter. Their total stake value was $182 million. In comparison, in the previous quarter, 17 hedge funds were long the stock, with a total stake value of $151 million.
3. Walgreens Boots Alliance, Inc. (NYSE:WBA)
Number of Hedge Fund Holders: 42
Dividend Yield: 4%
Walgreens Boots Alliance, Inc. (NYSE:WBA) is a health and beauty retail company operating through its United States and International segments. The company sells prescription drugs and other retail products such as health, wellness, and personal care products. The company has raised its dividend for the past seven years.
In January, Mizuho analyst Ann Hynes reiterated a Neutral rating on Walgreens Boots Alliance, Inc. (NYSE:WBA).
The company’s EPS in the fiscal first quarter of 2022 was $1.7, beating estimates by $0.3. Walgreens Boots Alliance, Inc. (NYSE:WBA) also had revenue of $33.9 billion, also beating estimates by $946.8 million.
Walgreens Boots Alliance, Inc. (NYSE:WBA) had 42 hedge funds holding stakes in it in the fourth quarter. Their total stake value was over $1 billion.
2. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 30
Dividend Yield: 4.5%
Realty Income Corporation (NYSE:O) is a real estate investment trust that provides its stockholders with a highly dependable monthly income, making it one of the best buy and hold forever dividend stocks. The company’s dividends are dependent upon cash flow from over 6,500 real estate properties owned by it, and have been raised for 25 years in a row.
Realty Income Corporation (NYSE:O) was upgraded from Peer Perform to Outperform just this March by Wolfe Research analysts.
The same month, Realty Income Corporation (NYSE:O) announced a dividend increase, bringing its current dividend up to $0.24 per share. The company has a record of sustainable dividend growth, which makes it an attractive dividend stock pick for the future as well.
Our fourth quarter hedge fund data shows 30 hedge funds long Realty Income Corporation (NYSE:O) in that quarter, with a total stake value of $398 million.
1. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 63
Dividend Yield: 4.9%
Verizon Communications Inc. (NYSE:VZ), a US-based multinational telecommunications company, is last on our list of the best buy and hold forever dividend stocks. The company is an active dividend-payer, having raised its dividend yield for the past 17 years in a row.
Deutsche Bank’s Bryan Kraft has a Hold rating on Verizon Communications Inc. (NYSE:VZ) shares as of this January.
Verizon Communications Inc. (NYSE:VZ) had an EPS of $1.3 in the fourth quarter of 2021, and revenue of $34.1 billion. Both beat consensus estimates by $0.03 and $30.6 million respectively.
There were 63 hedge funds long Verizon Communications Inc. (NYSE:VZ) in the fourth quarter, and 57 hedge funds long the stock in the third quarter of 2021. Their total stake values were $10.9 billion and $10.4 billion, respectively.
See also 15 Largest Chemical Companies in the World and 15 Best Gourmet Coffee Brands in the world.
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