In this article, we will take a look at 10 of the best global dividend stocks to buy.
Given several decades of rising globalization, many leading American companies do business around the world. Leading companies like Microsoft Corporation (NASDAQ:MSFT) sell Windows in the United States, Europe, and China, for example.
The leading companies have gone global to try to increase their market sizes. With larger market sizes, companies have more potential consumers, and more potential revenue opportunities. With more potential revenue, there’s potential for more profits.
Helping with this process is that many markets enjoy close ties with the United States. Major countries in Europe, for example, have been allies with the United States for many decades. Even countries like China have had strong relations with the United States such that trade between the two country amounted to almost $560 billion in total two way trade in 2020. The close ties makes doing business easier and helps facilitate the flow of capital.
Another reason for many American companies doing business globally is the U.S. dollar. Given the U.S dollar is the dominant global reserve currency, many emerging countries want it to develop and the U.S. dollar generally goes further in terms of purchasing power as a result in the emerging countries. As a result, leading U.S. companies that expand in emerging markets can often do it more cheaply because the U.S. dollar has more purchasing power.
Lastly, many leading U.S. companies go global because there is often less competition in emerging markets than in the U.S. market. With less competition, it’s easier to gain market share and to make profits.
2022 has been a challenging year in the markets given the higher inflation, the interest rate hikes by the Fed, and the Ukraine Russian war. As a result of the headwinds, the S&P 500 has fallen 19.5% year to date and the NASDAQ has fallen 29.3% year to date.
Given the uncertainties, it could be a good idea for investors to have a well diversified portfolio of stocks across many different sectors.
In terms of the dividend sector, here are 10 stocks that are global in terms of their operations and that also have an attractive dividend to consider.
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Methodology
For our list of 10 Best Global Dividend Stocks To Buy Now, we took 10 stocks with substantial earnings power that had global operations and also paid a dividend. Using the collective wisdom of hedge funds, we ranked the 10 stocks based on the number of hedge fund holders in our database that held shares of the same stocks at the end of Q2 2022.
10 Best Global Dividend Stocks To Buy Now
10. Pfizer Inc. (NYSE:PFE)
Dividend Yield as of 10/25: 3.51%
Number of Hedge Fund Holders: 70
Pfizer Inc. (NYSE:PFE) is a pretty global company. According to Statista, Pfizer Inc. (NYSE:PFE)’s U.S. sales were $29.75 billion in 2021 while its Developed Europe sales were $18.3 billion, its Developed Rest of World sales were $12.5 billion and its Emerging Markets sales were $20.7 billion for the same year.
Given the company’s dividend yield of 3.51% as of 10/25, Pfizer Inc. (NYSE:PFE) is also a dividend stock as well. If Pfizer Inc. (NYSE:PFE) exceeds expectations in terms of innovation, both the world and stock holders could benefit.
Alongside Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and Microsoft Corporation (NASDAQ:MSFT), Pfizer Inc. (NYSE:PFE) is also a global dividend stock that many hedge funds in our database owned at the end of the second quarter.
9. Eli Lilly and Company (NYSE:LLY)
Dividend Yield as of 10/25: 1.12%
Number of Hedge Fund Holders: 70
Like Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY) is also pretty global given it sells its pharmaceuticals in the U.S., EU, Japan, China, and elsewhere.
Eli Lilly and Company (NYSE:LLY) has also been a pretty strong performer in terms of its stock. While the broader market has declined substantially in 2022, Eli Lilly and Company (NYSE:LLY) stock has risen over 27% year to date. Shares are near an all time high as analysts expect Eli Lilly and Company (NYSE:LLY) earnings per share to grow substantially in the future. If EPS grows, the company’s dividend could grow too. As of 10/25, Eli Lilly and Company (NYSE:LLY) shares have a dividend yield of 1.12%.
Baron Funds commented on Eli Lilly and Company (NYSE:LLY) in a Q3 2022 investor letter,
In pharmaceuticals, our largest investment is in Eli Lilly and Company (NYSE:LLY). Lilly’s new diabetes drug Mounjaro is off to a strong start. In addition, Mounjaro may be approved for obesity next year. In clinical trials, Mounjaro delivered up to 22.5% average weight loss in adults with obesity and has the potential to be a top-selling drug. Lilly also has a drug in development for Alzheimer’s disease in the same class as Lecanemab, a drug being developed by Biogen and Eisai that slowed the rate of cognitive decline in a late-stage clinical trial. Lilly is not facing any significant near-term patent expirations and we think the company should be able to grow revenue and earnings at attractive rates through the end of the decade and beyond.”
8. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of 10/25: 2.79%
Number of Hedge Fund Holders: 71
Given it has operations in more than 180 countries, The Procter & Gamble Company (NYSE:PG) is a global company. Although the strong U.S. dollar isn’t good for The Procter & Gamble Company (NYSE:PG)’s near term international earnings, the company still has substantial earnings power. Given its 66 consecutive years of annual dividend increases and its dividend yield of 2.79% as of 10/25, The Procter & Gamble Company (NYSE:PG) is also still a dividend stock.
On 10/20, Lauren Lieberman of Barclays raised her price target on The Procter & Gamble Company (NYSE:PG) to $145 from $139 and kept an ‘Overweight’ rating citing that the company’s fiscal first quarter results were better than expected and that management commentary has helped sentiment.
7. NIKE, Inc. (NYSE:NKE)
Dividend Yield as of 10/25: 72
Number of Hedge Fund Holders: 1.33%
With North America accounting for around 41% of the company’s total sales, NIKE, Inc. (NYSE:NKE) is an international company. Lately, the company has faced some headwinds due to industry specific challenges as well as macro headwinds, however. Ensemble Capital explained NIKE, Inc. (NYSE:NKE)’s recent headwinds in a Q3 2022 letter,
“NIKE, Inc. (NYSE:NKE) (-18.4%): The company spent most of the quarter trading about in line with the overall market. But on the last day of the quarter, they reported earnings that demonstrated strong consumer demand, but a series of geographic and product level inventory level issues. Given the start-stop nature of their production during COVID, strained global supply chains, and China consumers popping in and out of lockdowns, the company ended up with too much apparel inventory and announced they’d be slashing prices on certain items to reset inventory to appropriate levels quickly.”
While NIKE, Inc. (NYSE:NKE) has headwinds, the stock nevertheless has potential earnings growth potential in the future given the increasing global population and rising global wealth.
As of 10/25, NIKE, Inc. (NYSE:NKE) shares have a dividend yield of 1.33% and a payout ratio of 33.2%. With the relatively low payout ratio, NIKE, Inc. (NYSE:NKE) could raise its dividend in the future without its earnings increasing very much.
6. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of 10/25: 2.65%
Number of Hedge Fund Holders: 83
Johnson & Johnson (NYSE:JNJ) is a global company given it has operations in over 175 countries.
Johnson & Johnson (NYSE:JNJ) is a dividend aristocrat given it has increased its dividend for 60 consecutive years. As a result of the dividend increases, Johnson & Johnson (NYSE:JNJ) shares currently yield 2.65%. Like its dividend, Johnson & Johnson (NYSE:JNJ)’s earnings per share has trended higher with occasional dips in the long term.
In terms of its EPS, Johnson & Johnson (NYSE:JNJ) had a relatively strong Q3 given adjusted EPS of $2.55 versus the consensus of $2.48. Sales for the period were $23.8 billion versus the consensus of $23.34 billion. For FY22, Johnson & Johnson (NYSE:JNJ) expects adjusted operation EPS of $10.70-$10.75 and sales of $93 billion to $93.5 billion.
Like Johnson & Johnson (NYSE:JNJ), Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and Microsoft Corporation (NASDAQ:MSFT) are all global dividend stocks that many hedge funds in our database owned at the end of Q2 2022.
5. JPMorgan Chase & Co. (NYSE:JPM)
Dividend Yield as of 10/25: 3.26%
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) is one of the leading banks in the United States that is also international given its substantial capital markets business. Although JPMorgan Chase & Co. (NYSE:JPM), along with other banks, will face headwinds if the U.S. economy weakens in 2023, banking with great risk management can still be pretty profitable in the long term as leading banks perform essential economic activity of lending out capital.
Since the Great Recession, JPMorgan Chase & Co. (NYSE:JPM)’s net income has more than doubled from 2010 to 2021. With the growth, JPMorgan Chase & Co. (NYSE:JPM)’s earnings per share more than cover its dividend by three times. Share buybacks could also be possible in 2023. As of 10/25, JPMorgan Chase & Co. (NYSE:JPM) shares yield 3.26%.
4. Apple Inc. (NASDAQ:AAPL)
Dividend Yield as of 10/25: 0.6%
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) is a global company given that the company sells its iPhones, iPads, and other profitable devices in many countries around the world.
Although Apple Inc. (NASDAQ:AAPL) may not have the highest dividend yield at around 0.6%, Apple Inc. (NASDAQ:AAPL)’s dividend has substantial growth potential given how much the company earns every year. Given how loyal many Apple Inc. (NASDAQ:AAPL) customers are and how innovative the company is, there’s potential for Apple Inc. (NASDAQ:AAPL) to grow in the future too.
Wedgewood Partners commented on Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter,
“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”
3. Mastercard Incorporated (NYSE:MA)
Dividend Yield as of 10/25: 0.63%
Number of Hedge Fund Holders: 137
Mastercard Incorporated (NYSE:MA) is a U.S. based company that also has many customers who use its payment solutions overseas. Although Mastercard Incorporated (NYSE:MA) faces currency headwinds internationally due to the strong U.S. dollar which makes its international earnings smaller in U.S. dollar terms, Mastercard Incorporated (NYSE:MA) has substantial and quality earnings potential that makes the stock a likely dividend grower in the future. As of 10/25, Mastercard Incorporated (NYSE:MA) shares yield 0.63%.
2. Visa Inc. (NYSE:V)
Dividend Yield as of 10/25: 0.77%
Number of Hedge Fund Holders: 166
Like Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V) is a U.S based company with many international customers.
In terms of its fiscal fourth quarter, payments at Visa Inc. (NYSE:V) grew 10% and processed transactions rose 12%. Sales rose to $7.79 billion from $6.56 billion and the company reported adjusted earnings of $1.93 per share, up 19% year over year. Given its earnings potential, Visa Inc. (NYSE:V)’s dividend is very secure. As of 10/25, Visa Inc. (NYSE:V) shares yield 0.77% but will likely be higher on 10/26 given that the company recently raised its quarterly dividend by 20% to $0.45 per share.
1. Microsoft Corporation (NASDAQ:MSFT)
Dividend Yield as of 10/25: 1.09%
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) is a global company given it sells its software around the world.
Microsoft Corporation (NASDAQ:MSFT) is also a dividend stock. Given its history of EPS growth, Microsoft Corporation (NASDAQ:MSFT) has raised its annual dividend for 19 straight years. Given that Microsoft Corporation (NASDAQ:MSFT) share price has also risen substantially in the last 19 years, the company only has a dividend yield of 1.09% as of 10/25. While that might sound low, the company still has a lot of dividend growth potential in the future given Microsoft Corporation (NASDAQ:MSFT)’s growth prospects.
For its first quarter, Microsoft Corporation (NASDAQ:MSFT) reported EPS of $2.35 versus the consensus $2.30, and revenue of $50.12 billion versus $49.61 billion expected by analysts. Although shares fell after hours due to weaker than expected guidance, the company still has strong long term prospects.
At the end of the second quarter, 258 hedge funds in our database owned shares of Microsoft Corporation (NASDAQ:MSFT), ranking the company #1 on our list of 15 Best Global Dividend Stocks To Buy Now.
You can also take a look at 15 Biggest Dow Companies By Market Cap and 12 Best Ethical Stocks To Buy Now.
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Disclosure: None. 10 Best Global Dividend Stocks To Buy Now is originally published on Insider Monkey.
