In this article, we discuss 10 dividend growth stocks popular on Robinhood.
Dividend growth stocks are categorized as companies that have consistently raised their dividend payouts over the years, but the companies still reinvest part of their cash in the business for growth and expansion activities.
Robinhood Markets, Inc. (NASDAQ:HOOD) is an American financial services corporation that allows retail and seasoned investors to indulge in commission-free trade of stocks, exchange traded funds, and cryptocurrencies. Robinhood has enabled retail traders to pour their savings and place bets on the stock market, with traffic on the platform surging during the pandemic years.
Goldman Sachs reported on March 7 that American investors in 2022 expect higher dividend payments and increased share buyback programs. Given solid sales, earnings growth, and fortress balance sheets, Goldman Sachs raised its 2022 S&P 500 buyback projections by 12% as compared to the prior year, reaching $1 trillion. The investment bank also lifted its dividend growth forecast to 10% from 8% in 2022.
There are mixed views about the impact of retail investors on the stock market. While some market experts believe that these investors are uninformed, assess risk inaccurately, and destabilize the stock markets, others suggest that retail investors provide higher market liquidity and promote stability by limiting stock-price crashes. Robinhood investors are an impactful community, and their recent dividend growth picks include Starbucks Corporation (NASDAQ:SBUX), PepsiCo, Inc. (NASDAQ:PEP), and Walmart Inc. (NYSE:WMT), among others discussed in detail below.
Photo by lucas Favre on Unsplash
Our Methodology
We carefully observed the Robinhood platform to assess the dividend growth stocks that were trending among investors over the last few weeks. We have mentioned the analyst ratings and hedge fund sentiment for each stock.
Data from 900+ elite hedge funds tracked by Insider Monkey at the end of December 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Dividend Growth Stocks Popular on Robinhood
10. Enbridge Inc. (NYSE:ENB)
Dividend Yield as of April 4: 5.79%
Number of Years of Consecutive Dividend Increases: 27
Number of Hedge Fund Holders: 21
Headquartered in Calgary, Canada, Enbridge Inc. (NYSE:ENB) operates as an energy infrastructure company. The company has five main segments – Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.
On December 7, Enbridge Inc. (NYSE:ENB) declared a C$0.860 per share quarterly dividend, a 3% increase from its prior dividend of C$0.835. The dividend was paid on March 1, for shareholders of record February 15. Enbridge Inc. (NYSE:ENB)’s dividend yield on April 4 stood at 5.79%.
In 2021, the full-year revenue for Enbridge Inc. (NYSE:ENB) was $47 billion, compared to $39 billion in the previous year. The net income for 2021 came in at $6.1 billion, up from $3.3 billion in 2020. The company’s cash flow for 2021 stood at $350 million, allowing it to realistically pay growing dividends in the near future.
BMO Capital analyst Ben Pham on February 14 maintained an Outperform rating on Enbridge Inc. (NYSE:ENB) and raised the price target on the shares to C$59 from C$57.
According to the fourth quarter database of Insider Monkey, 21 hedge funds were bullish on Enbridge Inc. (NYSE:ENB), with combined stakes worth $550 million, compared to 24 funds in the prior quarter, holding stakes in the company valued at $211.4 million. Rajiv Jain’s GQG Partners held the biggest position in Enbridge Inc. (NYSE:ENB), with 9.7 million shares worth $380.2 million.
In addition to Starbucks Corporation (NASDAQ:SBUX), PepsiCo, Inc. (NASDAQ:PEP), and Walmart Inc. (NYSE:WMT), Enbridge Inc. (NYSE:ENB) is a dividend growth stock popular on Robinhood.
Here is what ClearBridge Investments Dividend Strategy has to say about Enbridge Inc. (NYSE:ENB) in its Q3 2021 investor letter:
“We are meaningfully overweight energy, particularly within North American energy infrastructure. Enbridge and Williams, our two infrastructure holdings, possess crown jewel infrastructure assets. They each deliver meaningful proportions of the overall energy produced and consumed in North America. Their revenues are backed by long-term contracts with high-quality counterparties and have little direct commodity price exposure. Their growth has been driven by the increasing production of North American energy. The advent of unconventional oil and gas production (oil sand and shale) has made North America a low-cost competitor on a global basis. We expect strong North American production to be an enduring feature of global energy supply for decades to come.”
9. Realty Income Corporation (NYSE:O)
Dividend Yield as of April 4: 4.20%
Number of Years of Consecutive Dividend Increases: 28
Number of Hedge Fund Holders: 30
Realty Income Corporation (NYSE:O) is a California-based real estate investment trust that leases single-tenant commercial properties across the United States, the United Kingdom, and Spain. On March 15, Wolfe Research analyst Andrew Rosivach upgraded Realty Income Corporation (NYSE:O) to Outperform from Peer Perform.
On March 16, the company declared a $0.247 per share monthly dividend, a 0.2% increase from its earlier dividend of $0.246. The dividend is payable on April 15, to shareholders of record on April 1. Realty Income Corporation (NYSE:O) has consecutively increased its dividend payments for 28 years, and its dividend yield on April 4 came in at 4.20%.
According to Insider Monkey’s fourth quarter database, 30 hedge funds were bullish on Realty Income Corporation (NYSE:O), with stakes valued at approximately $399 million, compared to 22 funds in the last quarter, holding stakes in Realty Income Corporation (NYSE:O) worth $275 million. Matthew Barrett’s Glendon Capital Management held the largest position in the company, worth roughly $133 million.
8. Waste Management, Inc. (NYSE:WM)
Dividend Yield as of April 4: 1.63%
Number of Years of Consecutive Dividend Increases: 20
Number of Hedge Fund Holders: 35
Waste Management, Inc. (NYSE:WM) was incorporated in 1987 and is headquartered in Houston, Texas. The company offers waste management services to residential, commercial, industrial, and municipal customers in North America.
On March 1, Waste Management, Inc. (NYSE:WM) declared a quarterly dividend per share of $0.65, in line with previous. The dividend was paid on March 31, for shareholders of the company as of March 17. Waste Management, Inc. (NYSE:WM)’s dividend yield on April 4 came in at 1.63%, and the company has consecutively raised its dividend payments for 20 years. The stock also has an attractive dividend payout ratio of 43.40%, which means the company can sustainably pay dividends while funding growth activities.
Waste Management, Inc. (NYSE:WM)’s full-year revenue for 2021 stood at approximately $18 billion, up from $15.2 billion in the earlier year. Net income for 2021 was $1.8 billion, compared to a net income of $1.4 billion in 2020.
JPMorgan analyst Stephanie Yee reinstated coverage of Waste Management, Inc. (NYSE:WM) on March 1 with a Neutral rating and a $153 price target. According to the analyst, Waste Management, Inc. (NYSE:WM) provides an essential service while earning good margins and generating lots of free cash flow. He believes the company “is playing a bit of catch-up” on the pricing front given the cost inflation in 2021.
According to the Q4 database of Insider Monkey, Bill & Melinda Gates Foundation Trust held the largest stake in Waste Management, Inc. (NYSE:WM), with 18.6 million shares worth more than $3 billion. Overall, 35 hedge funds were bullish on the stock.
7. Altria Group, Inc. (NYSE:MO)
Dividend Yield as of April 4: 6.82%
Number of Years of Consecutive Dividend Increases: 52
Number of Hedge Fund Holders: 39
Altria Group, Inc. (NYSE:MO) is a Virginia-based manufacturer of smokable tobacco, pipe tobacco, and oral tobacco products in the United States. Altria Group, Inc. (NYSE:MO) is a notable dividend king with 52 years of consistent dividend increases under its belt.
On January 27, Altria Group, Inc. (NYSE:MO) reported its Q4 financial results. The company posted earnings per share of $1.09, beating estimates by $0.01. The $5.09 billion revenue outperformed market consensus by $88.06 million.
Altria Group, Inc. (NYSE:MO) declared on February 25 a $0.90 per share quarterly dividend. The dividend is payable on April 29, for shareholders of record on March 25. The stock delivers a dividend yield of 6.82% as of April 4.
RBC Capital analyst Nik Modi downgraded Altria Group, Inc. (NYSE:MO) to Sector Perform from Outperform with an unchanged price target of $53. The stock’s strong outperformance since December leaves limited room for further upside, according to the analyst.
According to the fourth quarter database of Insider Monkey, 39 hedge funds were bullish on Altria Group, Inc. (NYSE:MO), compared to 45 funds in the earlier quarter. Harris Associates is the biggest shareholder of the company, with more than 6 million shares worth $291.1 million.
Here is what Broyhill Asset Management has to say about Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter:
“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.”
6. 3M Company (NYSE:MMM)
Dividend Yield as of April 4: 3.99%
Number of Years of Consecutive Dividend Increases: 64
Number of Hedge Fund Holders: 41
3M Company (NYSE:MMM) was another popular dividend growth name on Robinhood. 3M Company (NYSE:MMM) is an American multinational conglomerate based in Minnesota, operating through four segments – Safety and Industrial, Transportation and Electronics, Health Care, and Consumer.
On January 25, 3M Company (NYSE:MMM) reported earnings for the fourth quarter of 2021. The company posted an EPS of $2.31, exceeding consensus estimates by $0.29. The Q4 revenue came in at $8.61, ahead of analysts’ predictions by $31.63 million.
3M Company (NYSE:MMM) declared on February 8 a $1.49 per share quarterly dividend, a 0.7% increase from its prior dividend of $1.48. The dividend was distributed to shareholders on March 15. 3M Company (NYSE:MMM)’s dividend yield on April 4 stood at 3.99% and the company has raised its dividend payouts for 64 years in a row.
Barclays analyst Julian Mitchell on April 4 lowered the price target on 3M Company (NYSE:MMM) to $155 from $170 and kept an Underweight rating on the shares. The analyst observed that a “decent” Q1 and solid start to Q2 does not matter enough, given the growth in orders will slow down and the deterioration in European industrial and U.S. residential demand. He dropped price targets for most residential and short cycle industrial names.
According to Insider Monkey’s Q4 data, 41 hedge funds were bullish on 3M Company (NYSE:MMM), with combined stakes worth $1.5 billion, compared to 46 funds in the prior quarter, holding stakes in 3M Company (NYSE:MMM) valued at $1.6 billion. Fisher Asset Management held the largest stake in the company, owning 5.7 million shares worth more than $1 billion.
3M Company (NYSE:MMM) has a rich dividend history, just like Starbucks Corporation (NASDAQ:SBUX), PepsiCo, Inc. (NASDAQ:PEP), and Walmart Inc. (NYSE:WMT).
5. The Kroger Co. (NYSE:KR)
Dividend Yield as of April 4: 1.46%
Number of Years of Consecutive Dividend Increases: 16
Number of Hedge Fund Holders: 41
The Kroger Co. (NYSE:KR) was founded in 1883 and is based in Cincinnati, Ohio. The company operates as a network of multi-department stores in the United States. The Kroger Co. (NYSE:KR) has a rich dividend history, with 16 years of consistent dividend growth.
On March 10, The Kroger Co. (NYSE:KR) declared a $0.21 per share quarterly dividend, in line with previous. The dividend is payable on June 1, for shareholders of record on May 13. The Kroger Co. (NYSE:KR)’s dividend yield on April 4 came in at 1.46% and its dividend payout ratio is 21.31%.
Scotiabank analyst Patricia Baker raised the price target on The Kroger Co. (NYSE:KR) to $64 from $60 and maintained an Outperform rating on the shares on March 10. According to the analyst, The Kroger Co. (NYSE:KR) reinforced its commitment to deliver 8%-11% total shareholder returns annually and its successful execution of the “Restock Kroger” initiative has increased investor confidence in the company’s strategic agenda.
According to the fourth quarter database of Insider Monkey, 41 hedge funds were bullish on The Kroger Co. (NYSE:KR), up from 39 funds in the earlier quarter. The total stakes held in Q4 amounted to $4.15 billion. Warren Buffett’s Berkshire Hathaway is the leading shareholder of The Kroger Co. (NYSE:KR), with 61.4 million shares worth $2.7 billion.
4. Starbucks Corporation (NASDAQ:SBUX)
Dividend Yield as of April 4: 2.22%
Number of Years of Consecutive Dividend Increases: 12
Number of Hedge Fund Holders: 53
Starbucks Corporation (NASDAQ:SBUX), the American multinational specialty coffee retailer, is one of the most popular dividend growth stocks on Robinhood. Starbucks Corporation (NASDAQ:SBUX)’s dividend yield on April 4 was 2.22%, which is above the industry average of 1.89%.
On March 22, Starbucks Corporation (NASDAQ:SBUX) declared a quarterly dividend of $0.49 per share. The dividend is payable on May 27, for shareholders of the company as of May 13. Starbucks Corporation (NASDAQ:SBUX) delivers a dividend payout ratio of 50.11%, indicating stability of payments and simultaneous business growth.
BMO Capital analyst Andrew Strelzik on April 5 lowered the price target on Starbucks Corporation (NASDAQ:SBUX) to $115 from $125 but reiterated an Outperform rating on the shares. The suspension of Starbucks Corporation (NASDAQ:SBUX)’s share repurchase program to allow for greater investment in employees and stores sends a “clear message” on its priorities, the analyst told investors in a research note.
According to Insider Monkey’s Q4 data, Terry Smith’s Fundsmith LLP is the leading shareholder of Starbucks Corporation (NASDAQ:SBUX), with 11.5 million shares worth $1.35 billion. Overall, 53 hedge funds were bullish on the stock at the end of December 2021.
Here is what Polen Global Growth has to say about Starbucks Corporation (NASDAQ:SBUX) in its Q4 2021 investor letter:
“We trimmed Starbucks as a source of funding and to edge our weighting down. While the company has managed well through a difficult environment, we recognize that lockdowns are categorically challenging for this business. Starbucks has a robust mobile order and pay platform fueled by a sophisticated app as well as a strong loyalty program, but this doesn’t alter the fact that the store-based retail business is important to the company. As a result, we felt a smaller weighting was appropriate.”
3. PepsiCo, Inc. (NASDAQ:PEP)
Dividend Yield as of April 4: 2.54%
Number of Years of Consecutive Dividend Increases: 50
Number of Hedge Fund Holders: 60
PepsiCo, Inc. (NASDAQ:PEP) is an American multinational corporation that markets and distributes beverages and convenient foods worldwide. PepsiCo, Inc. (NASDAQ:PEP) is a significant dividend king, which yields above the industry average of 1.89%.
On February 10, PepsiCo, Inc. (NASDAQ:PEP) reported its Q4 results. The company posted earnings per share of $1.53, exceeding estimates by $0.01. Revenue over the period jumped 12.44% year-over-year to $25.25 billion, outperforming market consensus by $1.01 billion. The company also authorized a share repurchase program worth $10 billion.
PepsiCo, Inc. (NASDAQ:PEP) increased its quarterly dividend to $1.075 per share on February 2. The dividend was paid on March 31, to shareholders of the company as of March 4. The stock delivers a dividend yield of 2.54% as of April 4.
JPMorgan analyst Andrea Teixeira on March 30 reiterated an Overweight rating on PepsiCo, Inc. (NASDAQ:PEP) and lowered the firm’s price target to $180 from $185. With the ongoing Russia/Ukraine conflict and its impact on commodities, the analyst slashed estimates for most of the companies in the beverages and personal care sectors. However, Teixeira noted that demand would remain solid.
Among the hedge funds tracked by Insider Monkey, 60 funds were bullish on PepsiCo, Inc. (NASDAQ:PEP) in the fourth quarter of 2021, holding combined stakes worth $4.6 billion. Yacktman Asset Management is a notable shareholder of the company, owning 4.45 million shares valued at roughly $774 million.
Here is what Saturna Capital Amana Funds has to say about PepsiCo, Inc. (NASDAQ:PEP) in its Q4 2021 investor letter:
“Given the likelihood of rising inflation and interest rates ahead, we anticipate adjustments to the portfolio to reduce exposure to highly valued stocks dependent on low interest rates to support terminal year valuations, while seeking investments in companies more correlated with a return to economic normalcy. We sold our positions in Pepsi. We believe Pepsi to be a well-run firm, but its products are not in keeping with an ESG mandate. Additionally, it has entered a joint venture to produce and distribute alcoholic beverages, making it ineligible for the portfolio.”
2. Walmart Inc. (NYSE:WMT)
Dividend Yield as of April 4: 1.48%
Number of Years of Consecutive Dividend Increases: 49
Number of Hedge Fund Holders: 63
Walmart Inc. (NYSE:WMT) is well on its way to becoming a dividend king, with 49 years of consistent dividend increases under its belt. Walmart Inc. (NYSE:WMT) is an Arkansas-based retailer that operates via a network of supercenters, supermarkets, hypermarkets, cash and carry stores, discount stores, and ecommerce websites.
Walmart Inc. (NYSE:WMT) declared on February 17 a $0.56 per share quarterly dividend, a 1.8% increase from its prior dividend of $0.55. The dividend was paid on April 4, to shareholders of the company as of March 18. Walmart Inc. (NYSE:WMT)’s dividend yield on April 4 came in at 1.48%.
On March 16, Morgan Stanley analyst Simeon Gutman reiterated an Overweight rating and a $167 price target on Walmart Inc. (NYSE:WMT) shares. The analyst believes that Walmart Inc. (NYSE:WMT)’s fintech startup, ONE, is creating an “affordable and broadly accessible digital platform” and he expects ONE to increase customer engagement and brand affinity to Walmart Inc. (NYSE:WMT)’s primary retail business.
Rajiv Jain’s GQG Partners is the largest stakeholder of Walmart Inc. (NYSE:WMT), with a position worth $1.5 billion. Overall, 63 hedge funds were bullish on the company at the end of the fourth quarter of 2021.
1. Bristol-Myers Squibb Company (NYSE:BMY)
Dividend Yield as of April 4: 2.93%
Number of Years of Consecutive Dividend Increases: 16
Number of Hedge Fund Holders: 66
Bristol-Myers Squibb Company (NYSE:BMY) is a New York-based multinational pharmaceutical company that provides pharmaceutical drugs for multiple therapeutic focus areas such as hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience. Bristol-Myers Squibb Company (NYSE:BMY)’s dividend yield on April 4 stood at 2.93%
The full-year revenue for Bristol-Myers Squibb Company (NYSE:BMY) in 2021 was $46.3 billion, compared to $42.5 billion in 2020. The company’s net income in 2021 rebounded significantly to roughly $7 billion from the $9 billion net loss the prior year. The cash flow also increased as compared to 2020, coming in at $17.2 billion at the end of December 2021.
On March 30, BMO Capital analyst Evan Seigerman raised the price target on Bristol-Myers Squibb Company (NYSE:BMY) to $81 from $74 and kept an Outperform rating on the shares. In addition to a robust product pipeline, Bristol-Myers Squibb Company (NYSE:BMY) shares are undervalued given the company’s strong fundamentals, and its margin leverage is underestimated, the analyst told investors in a research note.
Bristol-Myers Squibb Company (NYSE:BMY) declared on March 1 a $0.54 per share quarterly dividend, in line with previous. The dividend will be paid on May 2, for shareholders of record on April 1.
Among the hedge funds tracked by Insider Monkey, 66 funds were bullish on Bristol-Myers Squibb Company (NYSE:BMY) at the end of Q4 2021, with total stakes amounting to $3.3 billion. John Overdeck and David Siegel’s Two Sigma Advisors is the biggest stakeholder of the company, with 6.6 million shares worth $412.5 million.
Wedgewood Partners mentioned Bristol-Myers Squibb Company (NYSE:BMY) in its Q4 2020 investor letter. Here is what the fund had to say:
“Bristol-Myers Squibb recently reported accelerating sales as much of the medical services industry returned to work. The Company continues to expect double-digit earnings growth over the next few years, driven by existing drugs, in addition to a broad pipeline of new drugs and indications. While the market remains fixated on a couple of patent expirations that could occur over the next several years, we think this is well-known at this point, yet the market still undervalues a couple of key acquisitions the Company has made in the past few years, particularly Celgene, which was acquired for a song.”
You can also take a look at 10 Best Biotech Stocks Under $5 and 10 Stocks Trending on Robinhood.
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Disclosure: None. 10 Dividend Growth Stocks Popular on Robinhood is originally published on Insider Monkey.
