In this article, we discuss 10 best dividend stocks on Robinhood.
Even after the pandemic, retail investors continue to flood the financial market, accounting for 8% of pre-market trades in March 2022, up from 2% in January 2019, as reported by Financial Times. According to Charles Rotblut, an analyst at the American Association of Individual Investors, retail investors are exploring profitable options as the inflation wave reaches a crest, surging 8.3% in April from a year ago. Investors are paying attention to inverse funds and dividend-paying stocks to hedge the risk. According to a report published by Fidelity, during the inflationary periods of the 1940s and 1970s, dividends represented 65% and 71% of the S&P 500’s return, respectively. Moreover, dividend payments have accounted for over 40% of total stock market returns from 1930 to 2021.
According to Bloomberg, 99% of the companies listed on the Janus Henderson Global Dividend Index increased their payment due to the post-pandemic economic rebound, after slashing their dividends to a certain percentage during the pandemic. In the first quarter of 2022, the index reported an 11% year-over-year increase in dividend payments to $302.5 billion. The report also mentioned that the dividend payments have more than doubled since the inception of the index in 2009. Earlier this year, IHS Markit asserted that the global dividend payouts are expected to reach $2.09 trillion in 2022, up from $1.97% in 2021.
In light of this, we weigh up the best dividend stocks on Robinhood. Some of the major dividend stocks mentioned in the list are The Coca-Cola Company (NYSE:KO), Pfizer Inc. (NYSE:PFE), and Altria Group, Inc. (NYSE:MO).
Our Methodology:
The stocks mentioned in this list are popular on the Robinhood app and yield over 2%, as of June 6. Hedge fund sentiment around each dividend stock has been acquired from Insider Monkey’s database of 900+ elite funds tracked at the end of the first quarter of 2022.
10 Best Dividend Stocks on Robinhood
10. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Dividend Yield as of June 6: 2.56%
Johnson & Johnson is an American multinational company that specializes in medical devices and consumer health goods. In Q1 2022, the company reported a 5% year-over-year growth in its total sales at $23.4 billion. It also declared a 6.3% growth in its pharmaceutical sales to $12.8 billion, from the same period last year.
On April 19, Johnson & Johnson announced a 6.6% hike in its quarterly dividend to $1.13 per share. This was the company’s 60th consecutive dividend growth, which places it as one of the best dividend stocks on Robinhood. As of June 6, the stock’s dividend yield stood at 2.56%, compared with the S&P 500’s average yield of 1.38%.
In May, SVB Leerink initiated its coverage of Johnson & Johnson with an Outperform rating and a $200 price target. The firm appreciated the company’s ability to deliver consistent earnings growth and expects it to show growth in its medical device segment in the coming quarters.
Like other dividend stocks such as The Coca-Cola Company, Pfizer Inc., and Altria Group, Inc., Johnson & Johnson generated solid returns in the past year and returned 7.01% to shareholders, as of the close of June 6.
As per Insider Monkey’s Q1 2022 database, 83 hedge funds reported owning stakes in Johnson & Johnson, the same as in the previous quarter. The collective value of these stakes is over $7.4 billion. With a stake worth over $1.1 billion, Arrowstreet Capital held the largest position in the New Jersey-based company in Q1 2022.
Distillate Capital mentioned Johnson & Johnson in its Q2 2021 investor letter. Here is what the firm has to say:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
9. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 64
Dividend Yield as of June 6: 2.77%
In Q1 2022, The Coca-Cola Company topped analysts’ expectations, reporting a 16.7% year-over-year growth in its revenue, with an 11% growth in its concentrate sales. The Georgia-based beverage company also posted an EPS of $0.64, up 23% from the prior-year period, and beat estimates by $0.06.
In May, Morgan Stanley included The Coca-Cola Company in its list of the 15 stocks that have the potential to weather the bear market. The firm mentioned in its investors’ note that KO is one of the best stocks to buy in the current market environment and set a $76 price target on the stock, with an Overweight rating on the shares. The Coca-Cola Company is up 7.05% year-to-date.
The number of hedge funds tracked by Insider Monkey owning stakes in The Coca-Cola Company stood at 64 in Q1 2022, declining from 70 in the previous quarter. The collective value of these stakes is over $29 billion, up from $28.6 billion worth of stakes held by hedge funds in Q4 2021.
One of the best dividend stocks on Robinhood, The Coca-Cola Company currently pays a quarterly dividend of $0.44 per share, raising it by 4.8% in February. The company maintains a 60-year track record of consistent dividend growth. The stock offers a dividend yield of 2.77%, as of the close of June 6.
ClearBridge Investments mentioned The Coca-Cola Company in its Q4 2021 investor letter. Here is what the firm has to say:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
8. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 79
Dividend Yield as of June 6: 3.01%
Pfizer Inc., along with Moderna and BioNTech, has given over 10 million doses of Covid shots to the advisory committee for kids under the age of five, after completing the US regulatory submission earlier this month. In the first quarter of 2022, the multinational pharmaceutical company reported over $13 billion in Covid vaccine revenues and expects to reach $102 billion in net sales at the end of FY22.
In December 2021, Pfizer Inc. announced a quarterly dividend of $0.40 per share, up 2.6% from its previous dividend. The company has been paying dividends consistently for 334 quarters, with 12 years of consistent dividend growth. As of June 6, the stock’s dividend yield stood at 3.01%.
At the end of March 2022, 79 hedge funds tracked by Insider Monkey owned stakes in Pfizer Inc., falling from 83 in the previous quarter. These stakes hold a consolidated value of over $4.1 billion. AQR Capital Management was one of the prominent shareholders of the New York-based company in Q1 2022, owning a $554 million worth of stake.
In May, SVB Leerink assumed its coverage of Pfizer Inc. with a $55 price target and a Market Perform rating. The firm appreciated the company’s ingenious use of its Covid revenue in the Research and Development segment.
ClearBridge Investments mentioned Pfizer Inc. in its Q4 2021 investor letter. Here is what the firm has to say:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.
What we did not account for, however, was vaccine hesitancy and the risk of further infection waves. As a result, the first variant wave, Delta, was a negative surprise to both the market and our team. When the risk surfaced, we immediately updated our probability-driven models and debated how we should react. The resulting conclusion was that the recovery would be delayed and that we should reduce our exposure quickly, subsequently targeting the most aggressive recovery stocks such as cruise lines. We again acted swiftly and decisively to the positive surprise that Pfizer had delivered a high-efficacy antiviral COVID-19 pill. This pill should greatly reduce COVID-19 severity risks globally, increasing the probability of a global travel recovery in 2022. While this is still true, the emergence of the highly mutated Omicron variant set off another infection wave which spurred us to again act quickly and further reduce our risk exposure. This back-and-forth may sound exhausting, but it highlights our compulsion to act if we determine a surprise has a large enough impact on the probabilities that power our valuation-driven investment cases.
7. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Dividend Yield as of June 6: 3.21%
An American multinational energy company, Chevron Corporation (NYSE:CVX) recently announced the launch of a carbon capture and storage project to reduce the carbon intensity of its operations in San Joaquin Valley in California. The installation of CO2 post-combustion capture equipment will safely store the emitted carbon dioxide thousands of feet underground.
In Q1 2022, Chevron Corporation reported revenue of $54.3 billion, showing tremendous growth from $32 billion recorded in the year-ago period. However, the company posted an EPS of $3.36, which missed market estimates by $0.08.
Chevron Corporation currently pays a quarterly dividend of $1.42 per share, having raised it by 6% in January. The company is one of the best dividend stocks on Robinhood as it maintains a 35-year streak of consistent dividend growth. As of June 6, the stock’s dividend yield came to be recorded at 3.21%. In May, Barclays lifted its price target on Chevron Corporation to $196, with an Overweight rating on the shares, expecting the company to reach 0% net debt by 2026.
As per Insider Monkey’s Q1 2022 database, 53 hedge funds held a $28 billion worth of stake in Chevron Corporation. In comparison, 53 funds owned positions in the company in the previous quarter, with stakes valued at over $6.5 billion. Among these hedge funds, Berkshire Hathaway owned the largest stake in Chevron Corporation, worth roughly $26 billion.
ClearBridge Investments mentioned Chevron Corporation in its Q1 2022 investor letter. Here is what the firm has to say:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
6. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 83
Dividend Yield as of June 6: 3.55%
Exxon Mobil Corporation (NYSE:XOM) is a Texas-based oil and gas corporation. In Q1 2022, the company posted an EPS of $2.07, missing the market consensus by $0.16. The company’s revenue of $90.5 billion presented a 53% year-over-year growth and also beat analysts’ estimates by $6.93 billion. Exxon Mobil Corporation is up 56.6% year-to-date, as of the close of June 6.
According to Insider Monkey’s Q1 2022, 83 hedge funds reported owning stakes in Exxon Mobil Corporation, showing growth from 71 funds in the previous quarter. The consolidated value of these stakes is over $8.5 billion, up from $5.38 billion worth of stakes held by hedge funds in Q4 2021.
Exxon Mobil Corporation currently pays a quarterly dividend of $0.88 per share, with a dividend yield of 3.55%, as recorded on June 6. The company has raised its annual dividends consecutively for the past 39 years at an annual average rate of 6%, which makes it one of the best dividend stocks on Robinhood. Some other famous dividend stocks in the list are The Coca-Cola Company, Pfizer Inc., and Altria Group, Inc..
In June, JPMorgan lifted its price target on Exxon Mobil Corporation to $108, with an Overweight rating on the shares. The firm believes that the company has room for more valuation as it has shifted its attention towards capital discipline and a strong balance sheet. It further mentioned that XOM is in much better shape to return more capital to shareholders.
Saturna Capital mentioned Exxon Mobil Corporation in its Q4 2021 investor letter. Here is what the firm has to say:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
5. Edison International (NYSE:EIX)
Number of Hedge Fund Holders: 22
Dividend Yield as of June 6: 4.01%
Edison International (NYSE:EIX) is an American utility company that specializes in renewable energy and invests in energy services and technologies. At the end of March 2022, the company experienced a decline in hedge fund positions, as 22 hedge funds in Insider Monkey’s database reported owning stakes in the company, down from 25 in the previous quarter. These stakes hold a collective value of over $1.36 billion.
In December 2021, Edison International raised its quarterly dividend by 6% to $0.70 per share. This was the company’s 18th consecutive annual dividend increase. In the past 10 years, the Dividend Contender has grown its dividend by 7.5%. The stock has an attractive dividend yield of 4.01%, recorded on June 6.
In Q1 2022, Edison International reported solid earnings, posting an EPS of $1.07, which beat estimates by $0.26. The company generated revenue of $3.97 billion, presenting a 34% growth from the prior-year period and beating consensus by $630 million. Edison International expects its EPS to reach within the range of $4.40 to $4.70 for FY22.
Earlier in 2022, Edison International allocated over $2.2 billion for wildfire mitigation capital projects in 2022 and 2023. In May, Citigroup raised its price target on the stock to $79, with a Buy rating on the shares, appreciating the company’s continued wildfire mitigation efforts.
ClearBridge Investments mentioned Edison International in its Q4 2021 investor letter. Here is what the firm has to say:
“Defensive sectors such as utilities underperformed the broader market, with our California-based utilities, Edison International, generating modestly below-sector returns on continuing wildfire concerns, despite significantly improved financial exposure due to the 2019 legislation AB 1054. The legislation was a major positive step toward reducing wildfire risk to California public utilities, which we expect to be reflected in improved valuations over time.”
4. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 22
Dividend Yield as of June 6: 4.39%
Realty Income Corporation (NYSE:O) is an American real estate investment trust that invests in commercial properties in the US, Spain, and UK. In March, the company raised its monthly dividend by 0.2% to $0.247 per share. Realty Income Corporation has raised its dividend 115 times throughout its 53-year operating history, coming through as one of the best dividend stocks. As of June 6, the stock’s dividend yield came to be recorded at 4.39%.
In Q1 2022, Realty Income Corporation posted an FFO of $0.98, beating analysts’ expectations by $0.01. The company’s revenue for the quarter represented an 82.3% year-over-year growth and beat estimates by $58.6 million. Moreover, during the quarter, Realty Income Corporation also invested over $1.56 billion in 213 properties, taking the total to 11,288 properties in different countries.
In May, Wolfe Research set a $73 price target on Realty Income Corporation, while downgrading it to Peer Perform as the sector lacks repricing power due to high inflation.
Matthew Barrett’s Glendon Capital Management was the largest shareholder of Realty Income Corporation in Q1 2022, owning stakes over $128.6 million. Overall, the number of hedge funds tracked by Insider Monkey owning stakes in the company stood at 22 at the end of March 2022, down from 30 in the previous quarter. These stakes hold a consolidated value of roughly $285 million, compared with nearly $400 million worth of stakes held by hedge funds in Q4 2021.
3. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 47
Dividend Yield as of June 6: 6.67%
Altria Group, Inc. is an American manufacturing company that mainly deals in the production of tobacco, cigarettes, and related products. Insider Monkey’s Q1 2022 database shows that the hedge fund interest has spiked in the company, as 47 hedge funds held stakes in it, up from 39 in the previous quarter. The collective value of these stakes is roughly $2 billion, as compared with $1.05 billion worth of stakes held by hedge funds in Q4 2021.
On April 28, Altria Group, Inc. announced its earnings for the first quarter of 2022, posting an EPS of $1.12, which surpassed expectations by $0.03. However, the company’s revenue of $4.82 billion missed the market estimates by $60 million. Following the company’s Q1 results, Deutsche Bank lifted its price target on Altria Group, Inc. to $60, while maintaining a Buy rating on the shares.
On May 19, Altria Group, Inc. announced a quarterly dividend of $0.90 per share, consistent with its previous dividend. In the past 52 years, the company has raised its dividend 56 times, which makes it one of the best dividend stocks. On June 6, the stock’s dividend yield was recorded at 6.67%.
Broyhill Asset Management also mentioned Altria Group, Inc. in its Q2 2021 investor letter. Here is what the firm had to say:
“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
2. New Residential Investment Corp. (NYSE:NRZ)
Number of Hedge Fund Holders: 19
Dividend Yield as of June 6: 9.84%
New Residential Investment Corp. (NYSE:NRZ) is an American real estate investment trust that mainly maintains investments comprised of mortgage servicing rights and related segments.
New Residential Investment Corp. currently pays a quarterly dividend of $0.25 per share, growing it by 25% in 2021. The stock’s dividend yield, as of June 6, stood at 9.84%. In May, Piper Sandler analyst Kevin Barker mentioned in his investors’ note that New Residential Investment Corp. is fairly valued and is expected to deliver more within the mortgage and servicing sector. The analyst set a $12 price target on the stock while downgrading the stock to Neutral.
In Q1 2022, New Residential Investment Corp. posted an EPS of $0.37, beating the consensus by $0.02. During the quarter, the company also saw its book value climb by 10% to $12.56 per share and expects further growth in the second quarter.
As per Insider Monkey’s Q1 2022 database, 19 hedge funds held stakes in New Residential Investment Corp., the same as in the previous quarter. The consolidated value of these stakes is over $57.6 million. Arrowstreet Capital owned the largest stake in the New York-based company in Q1 2022, worth over $28.7 million.
1. MFA Financial, Inc. (NYSE:MFA)
Number of Hedge Fund Holders: 16
Dividend Yield as of June 6: 12.68%
MFA Financial, Inc. (NYSE:MFA), an American real estate investment trust, topped consensus in its first-quarter 2022 results. The company posted an EPS of $0.62, exceeding expectations by $0.23. The net interest income for the quarter stood at $63.05 million, presenting a 23.7% year-over-year growth.
MFA Financial, Inc. pays a quarterly dividend of $0.11 per share, with a dividend yield of 12.68%, as of the close of June 6. The company has been paying dividends for the past 22 years but suspended the payouts several times during this period. In April, JMP Securities lowered its price target on MFA Financial, Inc. to $18, but kept an Overweight rating on the shares, expressing concerns about the rising interest rates and geopolitical instability.
At the end of March 2022, 16 hedge funds tracked by Insider Monkey were bullish on MFA Financial, Inc., up from 15 in the previous quarter. The consolidated value of these stakes is $105.3 million. Millennium Management was one of the company’s leading shareholders in Q1 2022, owning stakes worth roughly $13.6 million.
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This article is originally published at Insider Monkey.
