In this article, we discuss 10 best FTSE dividend stocks to buy now.
The Office for National Statistics reported that the U.K. economy contracted by 0.3% in August, potentially initiating a long recession that can last throughout the winter. Wages have not kept up with the 10% inflation, which have sparked country-wide protests by public workers. The rising interest rates also wreaked havoc in the mortgage market, and banks withdrew products as rates soared for potential homebuyers.
The British pound also dropped to a record low against the dollar as a result of the finance minister Kwasi Kwarteng, who has now been sacked, announcing a so-called “mini-budget.” The pound regained some of its strength when the government retracted some of its extreme policies, such as demolishing the top rate of tax for the highest income bracket. Prime Minister Liz Truss might not be able to make good on her promises to ramp up growth in the economy with the current recession fears plaguing the market.
However, the FTSE 100’s total dividend payout is expected to exceed £81.5 billion in 2022, compared to £78.5 billion in 2021. This year, £1.6 billion in special dividends and a record £50.3 billion in share buybacks have already been declared. Since dividend stocks are the best hedges against inflation, income investors should check out some of the top FTSE dividend stocks to invest in, which include Unilever PLC (NYSE:UL), AstraZeneca PLC (NASDAQ:AZN), and Shell plc (NYSE:SHEL).
Our Methodology
We selected the following FTSE dividend stocks based on positive analyst coverage, strong business fundamentals, and solidity of dividend profiles. We have assessed the hedge fund sentiment from Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022.
Best FTSE Dividend Stocks To Buy Now
10. Pearson plc (NYSE:PSO)
Number of Hedge Fund Holders: 6
Dividend Yield as of October 14: 2.48%
Pearson plc (NYSE:PSO) was founded in 1844 and is headquartered in London, the United Kingdom. It provides educational books, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, Europe, and internationally. Pearson plc (NYSE:PSO) operates through five segments – Assessment & Qualifications, Virtual Learning, English Language Learning, Higher Education, and Workforce Skills. On October 10, Pearson plc (NYSE:PSO) CEO Andy Bird noted that the company is becoming a “growth stock” as it seeks to transform into a digital firm which operates as a “one-stop shop” for learning.
On August 10, Pearson plc (NYSE:PSO) announced a $0.081 per share semi-annual dividend. The dividend was distributed on September 22. Pearson plc (NYSE:PSO) delivers a dividend yield of 2.48% as of October 14.
Deutsche Bank analyst Benjamin Zoega on October 5 raised the price target on Pearson plc (NYSE:PSO) to 1,140 GBp from 900 GBp and kept a Buy rating on the shares.
According to Insider Monkey’s second quarter database, 6 hedge funds held stakes worth $17.8 million in Pearson plc (NYSE:PSO), compared to 9 funds in the prior quarter worth $35 million. Kenneth Squire’s 13D Management is the leading stakeholder of the company, with 810,659 shares valued at $7.5 million.
In addition to Unilever PLC (NYSE:UL), AstraZeneca PLC (NASDAQ:AZN), and Shell plc (NYSE:SHEL), Pearson plc (NYSE:PSO) is one of the best FTSE dividend stocks to buy now.
9. Smith & Nephew plc (NYSE:SNN)
Number of Hedge Fund Holders: 12
Dividend Yield as of October 14: 4.53%
Smith & Nephew plc (NYSE:SNN) was founded in 1856 and is headquartered in Watford, the United Kingdom. The company develops, manufactures, markets, and sells medical devices worldwide. It is one of the best FTSE dividend stocks to buy now. On September 28, Smith & Nephew plc (NYSE:SNN) declared a $0.288 per average diluted share semi-annual dividend, in line with the prior interim dividend. The dividend is payable on October 26, to shareholders of record on September 30. The company delivered a dividend yield of 4.53% on October 14.
On October 4, Barclays analyst Hassan Al-Wakeel maintained an Overweight rating on Smith & Nephew plc (NYSE:SNN) but lowered the price target on the stock to 1,530 GBp from 1,550 GBp.
According to the second quarter database of Insider Monkey, 12 hedge funds held stakes worth $105.4 million in Smith & Nephew plc (NYSE:SNN), compared to 15 funds in the earlier quarter worth $135.3 million. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the leading position holder in the company, with 1.65 million shares valued at $46 million.
Here is what Palm Valley Capital Management has to say about Smith & Nephew plc (NYSE:SNN) in its Q3 2022 investor letter:
“We bought Smith & Nephew plc (NYSE:SNN) toward the end of the quarter. Smith & Nephew is a London-based medical device company that specializes in knee and hip replacements, sports medicine, and wound management. We purchased the ADR, which has declined meaningfully (-31% year-to-date) along with the British pound. While Smith & Nephew’s stock is priced in pounds, its revenues are in other major currencies, such as the dollar, euro, and yen. In 2021, 51% of its revenues were generated in the United States, while 31% were in other developed markets. We believe Smith & Nephew is a high-quality business that generates above average profit margins and abundant free cash flow. We were pleased the turmoil in the British pound provided us with the opportunity to purchase its shares at a discount to our calculated valuation.”
8. Barclays PLC (NYSE:BCS)
Number of Hedge Fund Holders: 13
Dividend Yield as of October 14: 6.46%
Barclays PLC (NYSE:BCS) is a London-based provider of financial products and services in the United Kingdom, Europe, the Americas, Africa, the Middle East, and Asia. The company offers retail banking, credit cards, wholesale banking, investment banking, wealth management, and investment management services. On October 13, State Street Global Advisors announced that it will develop and manage a suite of active systematic fixed income solutions through a collaboration with Barclays PLC (NYSE:BCS)’s Research division.
On August 10, Barclays PLC (NYSE:BCS) declared a $0.105 per share semi-annual dividend. The dividend was paid to shareholders on September 16. The company delivers a dividend yield of 6.46% as of October 14. Barclays PLC (NYSE:BCS) is one of the best FTSE dividend stocks to invest in.
JPMorgan analyst Raul Sinha on October 11 reiterated a Neutral rating on Barclays PLC (NYSE:BCS) and lowered the price target on the shares to 180 GBp from 200 GBp.
According to Insider Monkey’s Q2 data, 13 hedge funds held stakes worth $152 million in Barclays PLC (NYSE:BCS), compared to 16 funds in the prior quarter worth $121 million. Mike Masters’ Masters Capital Management is a notable stakeholder of the company, with 4.50 million shares valued at $34.20 million.
7. Vodafone Group Public Limited Company (NASDAQ:VOD)
Number of Hedge Fund Holders: 15
Dividend Yield as of October 14: 8.60%
Vodafone Group Public Limited Company (NASDAQ:VOD) is based in Newbury, the United Kingdom, and the company offers mobile services, fixed line services, broadband, television offerings, and convergence services in Europe and internationally. Vodafone Group Public Limited Company (NASDAQ:VOD) is one of the best FTSE dividend stocks to invest in, with a dividend yield of 8.60% as of October 14.
Oddo BHF analyst Stephane Beyazian upgraded Vodafone Group Public Limited Company (NASDAQ:VOD) on October 4 to Outperform from Neutral with a price target of 142 GBp, up from 140 GBp. The analyst views the shares as too low into the sale of its Hungary unit, purchase of Nowo in Portugal, and merger talks with Three UK. A few more deals are possible, including a sale of the stake in Vantage Towers and a disposal of the Spanish fixed-line network, the analyst told investors.
According to Insider Monkey’s data, 15 hedge funds were bullish on Vodafone Group Public Limited Company (NASDAQ:VOD) at the end of June 2022, compared to 14 funds in the last quarter. Jim Simons’ Renaissance Technologies is the leading stakeholder of the company, with nearly 24 million shares worth $372.5 million.
6. British American Tobacco p.l.c. (NYSE:BTI)
Number of Hedge Fund Holders: 17
Dividend Yield as of October 14: 7.61%
British American Tobacco p.l.c. (NYSE:BTI) is a London-based company that provides tobacco and nicotine products to consumers worldwide. It is one of the highest yielding FTSE constituents, with a dividend yield of 7.61% as of October 14. On September 28, British American Tobacco p.l.c. (NYSE:BTI) declared a $0.7404 per share quarterly dividend, in line with previous. The dividend is distributable on November 15, to shareholders of record on September 30.
Barclays analyst Gaurav Jain on August 30 raised the price target on British American Tobacco p.l.c. (NYSE:BTI) to 4,500 GBp from 4,400 GBp and reiterated an Overweight rating on the shares.
According to Insider Monkey’s second quarter database, 17 hedge funds held stakes worth $2.3 billion in British American Tobacco p.l.c. (NYSE:BTI), compared to 19 funds in the prior quarter worth $2.2 billion. Rajiv Jain’s GQG Partners is the leading position holder in the company, with more than 34 million shares worth $1.5 billion.
Like Unilever PLC (NYSE:UL), AstraZeneca PLC (NASDAQ:AZN), and Shell plc (NYSE:SHEL), British American Tobacco p.l.c. (NYSE:BTI) is one of the best FTSE dividend stocks to consider.
Here is what Distillate Capital has to say about British American Tobacco p.l.c. (NYSE:BTI) in its Q1 2022 investor letter:
“Distillate Capital’s International FSV Strategy is less expensive, more fundamentally stable, and less levered than the benchmark All Country World Ex U.S. (ACWI-EX US) Index.The largest new position is British American Tobacco (NYSE:BTI), which was not owned previously due to leverage, but now passes that threshold and offers an 11% free cash flow to market cap yield.”
5. Unilever PLC (NYSE:UL)
Number of Hedge Fund Holders: 21
Dividend Yield as of October 14: 4.32%
Unilever PLC (NYSE:UL) is a London-based fast-moving consumer goods company. It operates through Beauty & Personal Care, Foods & Refreshment, and Home Care segments. On August 3, Unilever PLC (NYSE:UL) declared a $0.4343 per share quarterly dividend. The dividend was distributed to shareholders on September 1. Unilever PLC (NYSE:UL) is one of the best FTSE dividend stocks to invest in.
On September 29, Morgan Stanley analyst Pinar Ergun initiated coverage of Unilever PLC (NYSE:UL) with an Equal Weight rating and a $42.75 price target. The analyst believes investors are largely favoring Unilever PLC (NYSE:UL) in the food sector but will be looking to see growth in the coming quarters in order to turn more optimistic on the stock.
According to Insider Monkey’s Q2 data, 21 hedge funds were bullish on Unilever PLC (NYSE:UL), compared to 23 funds in the last quarter. Tom Russo’s Gardner Russo & Gardner is the largest stakeholder of the company, with approximately 7 million shares worth $319 million.
Here is what Mayar Capital specifically said about Unilever PLC (NYSE:UL) in its Q2 2022 investor letter:
“In 1895 the Lever brothers created a new brand of hand soap. Inspired by the growing demand for hygiene products, the Lifebuoy brand of soaps was launched to ‘make health infectious’. 128 years later the Lifebuoy brand continues as a leading soap brand – albeit without the coal tar-derived ingredients list. In fact, the market research firm Kantar ranked Lifebuoy as the global #3 most chosen FMCG brand in 2020, just below Coca-Cola (KO) and Colgate (CL) – an astonishing fact given the age of the brand. While the brand is largely absent from shelves here in the UK, it is a juggernaut in Asian markets, and is the #1 brand in India.
There are two observations about the Lifebuoy story which tell us a lot about Unilever PLC (NYSE:UL), which is currently our largest holding in the Fund.
The first is the enduring power of brands in the consumer goods market. According to Kantar’s list of most chosen brands, the top 20 global marques have an average age of 116 years, with over half being founded in the 19th century. Fashions come and go, but there is something special about low-cost consumable goods that advantages strong, time-worn brand names…” (Click here to view full text)
4. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 27
Dividend Yield as of October 14: 4.71%
BP p.l.c. (NYSE:BP) was founded in 1908 and is headquartered in London, the United Kingdom. BP p.l.c. (NYSE:BP) engages in the energy business worldwide, operating through Gas & Low Carbon Energy, Oil Production & Operations, Customers & Products, and Rosneft segments. BP p.l.c. (NYSE:BP) is one of the premier FTSE dividend stocks. The company delivers a dividend yield of 4.71% as of October 14.
On October 13, JPMorgan analyst Christian Malek raised the price target on BP p.l.c. (NYSE:BP) to 530 GBp from 520 GBp and maintained a Neutral rating on the shares.
Among the hedge funds tracked by Insider Monkey, 27 funds reported owning stakes worth $1.7 billion in BP p.l.c. (NYSE:BP) at the end of June 2022, compared to 27 funds in the prior quarter worth $1.8 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the largest stakeholder of the company, with 26.5 million shares worth $750.4 million.
3. GSK plc (NYSE:GSK)
Number of Hedge Fund Holders: 34
Dividend Yield as of October 14: 5.93%
GSK plc (NYSE:GSK) is headquartered in Brentford, the United Kingdom, and the company is engaged in the development, manufacture, and marketing of pharmaceutical products, vaccines, over-the-counter medicines, and health-based consumer products in the United Kingdom, the United States, and internationally. It operates through four segments – Pharmaceuticals, Pharmaceuticals R&D, Vaccines, and Consumer Healthcare. On August 17, GSK plc (NYSE:GSK) declared a $0.3908 per share quarterly dividend. The dividend was paid on October 6. GSK plc (NYSE:GSK)’s dividend yield on October 14 came in at 5.93%.
On October 13, Barclays analyst Emily Field maintained an Equal Weight rating on GSK plc (NYSE:GSK) but trimmed the price target on the shares to 1,450 GBp from 1,800 GBp.
According to Insider Monkey’s second quarter database, 34 hedge funds were long GSK plc (NYSE:GSK), compared to 33 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management featured as the leading stakeholder of the company, with 19.5 million shares worth $851.80 million.
2. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 39
Dividend Yield as of October 14: 3.85%
Shell plc (NYSE:SHEL) is a London-based energy and petrochemical company operating in Europe, Asia, Oceania, Africa, the United States, and the rest of the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. Shell plc (NYSE:SHEL) is one of the best FTSE dividend stocks to invest in. The dividend yield on October 14 came in at 3.85%.
JPMorgan analyst Christian Malek on October 13 reiterated an Overweight rating on Shell plc (NYSE:SHEL) but lowered the price target on the shares to 2,900 GBp from 3,000 GBp.
According to Insider Monkey’s second quarter database, 39 hedge funds were bullish on Shell plc (NYSE:SHEL), compared to 37 funds in the prior quarter. William B. Gray’s Orbis Investment Management is a prominent stakeholder of the company, with 9 million shares worth nearly $478 million.
Here is what Harding Loevner International Equity Fund has to say about Shell plc (NYSE:SHEL) in its Q1 2022 investor letter:
“While risks of unforeseen consequences arising from the Ukraine conflict are high, on this front we are cautiously optimistic that China will work hard to maintain its neutrality in a credible way, as it is a huge beneficiary of trade with the rest of the world, especially the rich developed nations. We think it likely that China, along with India, will continue to buy oil and gas from Russia (just as Europe, at least for now, plans to keep its gas pipelines open), and do not expect that fact to alter China’s trade relations with the West much. Nevertheless, we must contemplate that our optimism is misplaced on the importance of membership in the global network of exchange. If our central and optimistic case—admittedly an educated guess—is wrong, then we’d need to greatly modify our views of which companies in our opportunity set will face new barriers to profitable growth, and which might stand to benefit, relatively, from a further receding of globalization. (Global trade, after all, has never matched the peak share of GDP it reached in 2008, before the Global Financial Crisis.) We’d expect such a world to be less efficient, as the cold logic of comparative advantage is demoted as a determinant of which goods or services are produced and where. That would lead to a less prosperous world, since exploiting comparative advantage is a cornerstone of wealth creation. If regional blocs began to raise limits on the movement of capital as well as goods, we’d need to parse which of our multinational companies were at risk of declining sales from increasingly hostile, siloed countries. Royal Dutch Shell (NYSE:SHEL) has found its Siberian oil and gas joint venture assets stranded by the combination of sanctions and the public opprobrium of Russia’s actions.”
1. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders: 47
Dividend Yield as of October 14: 3.42%
AstraZeneca PLC (NASDAQ:AZN) was incorporated in 1992 and is headquartered in Cambridge, the United Kingdom. It is a biopharmaceutical company that focuses on the discovery, development, manufacturing, and commercialization of prescription medicines. AstraZeneca PLC (NASDAQ:AZN)’s dividend yield on October 14 came in at 3.42%. It is one of the best FTSE dividend stocks to invest in.
On October 11, Guggenheim analyst Seamus Fernandez maintained a Buy rating on AstraZeneca PLC (NASDAQ:AZN) ahead of the Q3 results but slashed the price target on the shares to 11,800 GBp from 12,000 GBp after updating his model to factor in lowered expectations for COVID-19 revenues in Q3 2022 and beyond, higher cost of goods and OpEx spending, and currency trends.
Among the hedge funds tracked by Insider Monkey, 47 funds were bullish on AstraZeneca PLC (NASDAQ:AZN) at the end of Q2 2022, compared to 45 funds in the earlier quarter. Rajiv Jain’s GQG Partners is a significant position holder in the company, with 18.7 million shares valued at $1.2 billion.
Here is what Carillon Tower Advisers specifically said about AstraZeneca PLC (NASDAQ:AZN) in its Q2 2022 investor letter:
“AstraZeneca PLC (NASDAQ:AZN) benefited from the same-industry rotation into pharmaceuticals. The company also reported strong clinical data for a new drug to treat breast cancer.”
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Disclosure: None. 10 Best FTSE Dividend Stocks To Buy Now is originally published on Insider Monkey.
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