In this article, we discuss 10 dividend stocks for beginners.
Some traders begin their investment journey in hopes of share price gains, but most retail and novice investors are interested in the stock market for dividend payments. Dividends are an effective hedge against rising inflation, and during the wide market sell off in growth stocks, investors poured into stable businesses that make cash payments to shareholders, including banks, oil companies, and telecoms.
Dividends are a significant factor in controlling overall portfolio risk and volatility. In terms of lowering risk, dividend payments help navigate losses that are incurred from a drop in stock price. Investors who seek passive income but cannot afford expensive income stocks like Microsoft Corporation (NASDAQ:MSFT), Johnson & Johnson (NYSE:JNJ), and Apple Inc. (NASDAQ:AAPL) usually go for cheaper names that pay dividends.
Our Methodology
We ensured that the selected dividend stocks yield over 2% as of May 6, received positive analyst ratings recently, and have strong hedge fund sentiment surrounding them. Since beginners do not have a high budget for investments, we picked stocks priced under $30 as of May 6.
Dividend Stocks For Beginners
10. Kinder Morgan, Inc. (NYSE:KMI)
Dividend Yield as of May 6: 5.75%
Number of Hedge Fund Holders: 39
Kinder Morgan, Inc. (NYSE:KMI) was founded in 1936 and is headquartered in Houston, Texas. Kinder Morgan, Inc. (NYSE:KMI) is an energy infrastructure company that operates through four segments – Natural Gas Pipelines, Products Pipelines, Terminals, and CO2.
On April 20, Kinder Morgan, Inc. (NYSE:KMI) announced its financial results for the first fiscal quarter of 2022, posting an EPS of $0.32, beating Street estimates by $0.04. The $4.29 billion revenue surpassed market consensus forecasts by $546.32 million.
Kinder Morgan, Inc. (NYSE:KMI) declared on April 20 a $0.2775 per share quarterly dividend, a 2.8% increase from its prior dividend of $0.27. The dividend is payable on May 16, to shareholders of the company as of May 2. This marks the company’s fifth consecutive annual dividend increase, and Kinder Morgan, Inc. (NYSE:KMI)’s dividend yield on May 6 came in at 5.75%.
Truist analyst Neal Dingmann assumed coverage of Kinder Morgan, Inc. (NYSE:KMI) on May 2 with a Buy rating and a $22 price target as he took over the firm’s Midstream Oil and Gas coverage.
According to the fourth quarter database of Insider Monkey, 39 hedge funds held long positions in Kinder Morgan, Inc. (NYSE:KMI), with collective stakes worth about $999 million. Bob Peck and Andy Raab’s FPR Partners is the leading shareholder of the company, with 17.8 million shares worth $282.7 million.
In addition to Microsoft Corporation (NASDAQ:MSFT), Johnson & Johnson (NYSE:JNJ), and Apple Inc. (NASDAQ:AAPL), elite investors are piling into Kinder Morgan, Inc. (NYSE:KMI).
9. Berry Corporation (NASDAQ:BRY)
Dividend Yield as of May 6: 2.18%
Number of Hedge Fund Holders: 15
Berry Corporation (NASDAQ:BRY) is a Texas-based upstream energy company, operating conventional oil reserves located in the western United States. Berry Corporation (NASDAQ:BRY)’s dividend yield on May 6 stood at 2.18%. On March 11, Berry Corporation (NASDAQ:BRY) declared a $0.06 per share quarterly dividend, in line with previous. The dividend was paid to shareholders on April 15.
Berry Corporation (NASDAQ:BRY) reported on May 4 earnings for the first quarter of 2022. The company announced a Q1 non-GAAP EPS of $0.51, ahead of analysts’ estimates by $0.04. The revenue of $210.35 million climbed 55.5% year-over-year, exceeding market consensus by $16.05 million. The company generated discretionary free cash flow of $17 million, including working capital of $37 million.
Piper Sandler analyst Mark Lear on April 7 upgraded Berry Corporation (NASDAQ:BRY) to Overweight from Neutral, raising the price target to $14 from $11. With Western sanctions extending to the Russian energy sector, Piper’s Energy Macro team believes that the U.S. is one of the few regions to deliver long-term supply growth in crude oil. In the first season of the post-COVID recovery, the analyst believes supply chain issues will ultimately drive crude prices higher, which has positive implications for the equities despite the robust performance year-to-date.
According to the database of Insider Monkey, Berry Corporation (NASDAQ:BRY) was found in the public stock portfolios of 15 hedge funds at the end of Q4 2021, compared to 14 funds in the earlier quarter. Howard Marks’ Oaktree Capital Management is the leading shareholder of the company, with approximately 13 million shares worth $108.73 million.
Here is what Heartland Value Fund has to say about Berry Corporation (NASDAQ:BRY) in its Q4 2021 investor letter:
“Uncertainty about economic growth in the coming quarters weighed on Energy companies in the broader market. Longer term, we believe the capital discipline oil producers have shown over the past few years will provide support for energy prices as increased incremental demand will continue to absorb modest production increases. The Fund’s holdings in the sector fared better, and the portfolio owns well managed producers with strong balance sheets. Longtime holding Berry Corporation (BRY) fits this profile.
We highlighted Berry in the third quarter commentary praising its seasoned management team and financial strength. The company maintained its record of shareholder-friendly policies during the most recent quarter.
The move, along with compelling valuations—shares trade at just 4.7X EV/EBITDA—makes Berry, in our view, an attractive opportunity. Management remains disciplined in allocating capital, reining in debt, and focusing on high-margin production. This approach, along with aggressive efforts to return capital to shareholders through share repurchases and increased dividends, should attract additional investor interest.”
8. Global Ship Lease, Inc. (NYSE:GSL)
Dividend Yield as of May 6: 4.34%
Number of Hedge Fund Holders: 17
Global Ship Lease, Inc. (NYSE:GSL) was founded in 2007 and is based in London, leasing containerships under fixed-rate charters to container shipping companies. Global Ship Lease, Inc. (NYSE:GSL)’s dividend yield on May 6 stood at 4.34%, above the average industrials yield of 2.36%.
On February 10, Global Ship Lease, Inc. (NYSE:GSL) declared a quarterly dividend of $0.25 per share. The dividend was paid on March 4, to shareholders of record on February 22.
In 2021, Global Ship Lease, Inc. (NYSE:GSL)’s full-year revenue came in at $402.5 million, compared to a revenue of $282.3 million in 2020. Net income for 2021 grew 312.61% to $171.5 million from $41.6 million in the prior year.
Riley analyst Liam Burke on March 3 reiterated a Buy recommendation on Global Ship Lease, Inc. (NYSE:GSL) and raised the firm’s price target on the shares to $38 from $33 after the Q4 results were published. The company saw the full benefit of the accretive acquisition of additional fleet assets that brought its vessel count to 65, the analyst told investors in a bullish thesis.
According to Insider Monkey’s Q4 data, 17 hedge funds were long Global Ship Lease, Inc. (NYSE:GSL), with collective stakes worth about $150 million, compared to 14 funds in the last quarter, holding stakes in the company valued at $100.2 million. David Salanic’s Whitefort Capital is the leading shareholder of the company, with 963,226 shares worth over $22 million.
Here is what Massif Capital has to say about Global Ship Lease, Inc. (NYSE:GSL) in its Q4 2021 investor letter:
“We initiated a 6% position in GSL, bringing total maritime transit exposure up to ~9% of the portfolio when combined with our 3% SBLK position. GSL is a containership owner, leasing ships to container companies (such as Maersk) at fixed rates. As owners, they own and manage the vessels (responsible for crews, maintenance, insurance) but do not have fuel costs. GSL focuses on mid-size to smaller containerships, which serve the faster-growing inter-regional trade routes that represent ~70% of global containerized trade volume.
As they own its containers, their business is both pro-cyclical (chartered tonnages used as growth platform by liner shipping companies) and counter-cyclical (with the sale and leaseback structures used by liner companies as a balance sheet management tool). GSL has a track record that includes both organic acquisitions and a strategic combination in Q4 2018 that doubled the size of the fleet.
We like GSL because they do not have as much operational leverage as a company like ZIM (which leases on both sides of the trade), and they sign 2–5-year contracts. Liners have been eager to secure that capacity for extended durations spanning multiple years, significantly longer than has been the case historically and well-aligned with GSL’s strategic preference to lock in value over time and provide forward visibility on cash flows…” (Click here to see the full text)
7. CI Financial Corp. (NYSE:CIXX)
Dividend Yield as of May 6: 4.51%
Number of Hedge Fund Holders: 17
CI Financial Corp. (NYSE:CIXX) is a Canadian asset management holding company that specializes in equity, fixed income, alternative investments, mutual funds, hedge funds, and fund of funds. While the average dividend yield for the financial sector stands at 3.18%, CI Financial Corp. (NYSE:CIXX) yields 4.51% as of May 6.
CI Financial Corp. (NYSE:CIXX) declared on February 25 a $0.18 per share quarterly dividend, a 26.8% increase from its earlier dividend of $0.14. The dividend is distributable on July 15, to shareholders of record on June 30.
On April 29, CI Financial Corp. (NYSE:CIXX) reported preliminary assets under management of C$145 billion as of March 31, 2022, compared to C$138.5 billion in the prior-year quarter. The wealth management assets of C$224.7 billion also increased from C$102.1 billion in the earlier year.
BMO Capital analyst Tom MacKinnon reiterated an Outperform rating on CI Financial Corp. (NYSE:CIXX) but lowered the firm’s price target on the shares to C$26 from C$32 on May 5.
According to the fourth quarter database of Insider Monkey, CI Financial Corp. (NYSE:CIXX) was part of the public stock portfolios of 17 hedge funds, compared to 13 funds in the last quarter. The total stakes held in Q4 2021 amounted to $203.6 million, up from $186.2 million in Q3. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the biggest shareholder of CI Financial Corp. (NYSE:CIXX), with 1.95 million shares worth roughly $41 million.
Like Microsoft Corporation (NASDAQ:MSFT), Johnson & Johnson (NYSE:JNJ), and Apple Inc. (NASDAQ:AAPL), institutional investors are pouring into CI Financial Corp. (NYSE:CIXX) for dividend income.
6. Enterprise Products Partners L.P. (NYSE:EPD)
Dividend Yield as of May 6: 6.90%
Number of Hedge Fund Holders: 21
Enterprise Products Partners L.P. (NYSE:EPD) is an American midstream energy company that operates via NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services segments.
Enterprise Products Partners L.P. (NYSE:EPD)’s dividend yield on May 6 was 6.90%. The company has raised its dividends for 26 years in a row. On April 7, Enterprise Products Partners L.P. (NYSE:EPD) declared a $0.465 per share quarterly dividend, in line with previous. The dividend is payable on May 12, for shareholders of record on April 29.
On May 2, Enterprise Products Partners L.P. (NYSE:EPD) announced earnings for Q1 2022, posting an EPS of $0.60, above market consensus by $0.07. Revenue for the period grew 42% year-over-year to $13.01 billion, outperforming analysts’ predictions by $2.54 billion.
Truist analyst Neal Dingmann on May 3 maintained a Buy recommendation on Enterprise Products Partners L.P. (NYSE:EPD) and raised the firm’s price target on the stock to $30 from $27. The analyst cited Enterprise Products Partners L.P. (NYSE:EPD)’s “outsized” Q1 earnings beat and its new growth projects announced at analyst day.
Insider Monkey’s database suggests that 21 hedge funds were long Enterprise Products Partners L.P. (NYSE:EPD) at the end of December 2021, compared to 25 funds in the last quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest shareholder of the company, with more than 3 million shares worth $69 million.
Here is what ClearBridge Investments has to say about Enterprise Products Partners L.P. (NYSE:EPD) in its Q1 2021 investor letter:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names (including) Enterprise Products Partners LP. We are positive on this company’s strong balance sheets, competitive positions and exposure to an economic recovery.”
5. Compass Diversified (NYSE:CODI)
Dividend Yield as of May 6: 4.33%
Number of Hedge Fund Holders: 11
Compass Diversified (NYSE:CODI) is a private equity company engaged in acquisitions, buyouts, industry consolidation, recapitalization, and late stage and middle market investments. The firm invests through its balance sheet and generally has an investment horizon of five to seven years.
Compass Diversified (NYSE:CODI) reported its financial results for the first fiscal quarter of 2022 on May 5, posting earnings per share of $0.52, beating market estimates by $0.21. The revenue grew 10.60% year-over-year to $510.51 million, ahead of consensus estimates by $29.26 million.
On April 4, Compass Diversified (NYSE:CODI) declared a quarterly dividend of $0.25 per share, in line with previous. The dividend was paid on April 28, to shareholders of the company as of April 21. Compass Diversified (NYSE:CODI)’s dividend yield on May 6 came in at 4.33%. The investment advisory firm B. Riley initiated coverage of the stock on April 8 with a Buy rating and a $33 price target.
According to Insider Monkey’s Q4 data, Compass Diversified (NYSE:CODI) was found in the public portfolios of 11 hedge funds, compared to 8 funds in the last quarter. Chuck Royce’s Royce & Associates is the biggest shareholder of the company, with 961,239 shares worth $29.3 million.
4. Crescent Energy Company (NYSE:CRGY)
Dividend Yield as of May 6: 2.85%
Number of Hedge Fund Holders: 5
Crescent Energy Company (NYSE:CRGY) was founded in 2020 and is based in Houston, Texas, operating as a provider of crude oil, natural gas, and natural gas liquids. Priced at $16.86, Crescent Energy Company (NYSE:CRGY) offers a dividend yield of 2.85% as of May 6, which merits its inclusion in out list of the top dividend stocks for beginners.
On March 10, Crescent Energy Company (NYSE:CRGY) declared a quarterly dividend of $0.12 per share. The dividend was distributed on March 31, for shareholders of record on March 18. The company also announced a full-year revenue of $1.48 billion for 2021, up 96.2% year-over-year. Crescent Energy Company (NYSE:CRGY) expects to activate 32 to 38 wells in the Eagle Ford in 2022, with more than 90% average working interest. The company guided for levered free cash flow of $325 million to $375 million this year.
Truist analyst Neal Dingmann on April 8 initiated coverage of Crescent Energy Company (NYSE:CRGY) with a Buy rating and a $24 price target. The analyst remains positive on Crescent Energy Company (NYSE:CRGY)’s “diversified” asset base and “stable” production and cash flow, along with a “notable accretive” acquisition history. The company has already raised its dividend to nearly 4% in the short time since its reverse merger, and given its robust free cash flows, the yield could increase further, the analyst told investors in a bullish thesis.
Among the hedge funds tracked by Insider Monkey, 5 funds were long Crescent Energy Company (NYSE:CRGY) in the fourth quarter of 2021, with collective stakes worth over $5 million.
3. Deluxe Corporation (NYSE:DLX)
Dividend Yield as of May 6: 4.50%
Number of Hedge Fund Holders: 12
Deluxe Corporation (NYSE:DLX) operates through four segments – Payments, Cloud Solutions, Promotional Solutions, and Checks, offering technology solutions to small and enterprise-level businesses and financial institutions in the United States, Canada, Australia, South America, and Europe.
On May 5, Deluxe Corporation (NYSE:DLX) declared a $0.30 per share quarterly dividend, in line with previous. The dividend is distributable on June 6, to shareholders of the company as of May 23. Deluxe Corporation (NYSE:DLX)’s dividend yield on May 6 came in at 4.50%.
Deluxe Corporation (NYSE:DLX) announced its Q1 results on May 5, posting earnings per share of $1.05, beating estimates by $0.03. The revenue grew 26% from the prior-year quarter, reaching $556 million, surpassing market consensus by $23.87 million.
Cowen analyst Lance Vitanza maintained an Outperform rating on Deluxe Corporation (NYSE:DLX) but lowered the price target on the shares to $42 from $50 on April 27. The analyst noted that revenue forecasts remain unchanged but he cut his profitability projections in 1H22 to reflect the rising inflationary pressures. He expects margins to improve later in the year and beyond as the company benefits from inherent operating leverage, the analyst added.
Select Equity Group is the largest stakeholder of Deluxe Corporation (NYSE:DLX), with 1.5 million shares worth $49.2 million. Overall, 12 hedge funds were bullish on the stock at the end of December 2021.
2. Invesco Ltd. (NYSE:IVZ)
Dividend Yield as of May 6: 4.06%
Number of Hedge Fund Holders: 34
Invesco Ltd. (NYSE:IVZ) is a Georgia-based public investment manager that specializes in equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. Invesco Ltd. (NYSE:IVZ) serves retail and institutional clients, high-net worth individuals, public corporations, unions, non-profit organizations, endowments, pension funds, financial institutions, and sovereign wealth funds.
On April 26, Invesco Ltd. (NYSE:IVZ) declared a $0.1875 per share quarterly dividend, a 10.3% increase from its prior dividend of $0.17. The dividend is payable on June 2, for shareholders of record on May 10. Deutsche Bank analyst Brian Bedell on April 27 maintained a Buy recommendation on Invesco Ltd. (NYSE:IVZ) but lowered the firm’s price target on the stock to $24 from $26 following the “good” Q1 results.
Among the hedge funds tracked by Insider Monkey, 34 funds were bullish on Invesco Ltd. (NYSE:IVZ) at the end of Q4 2021, with collective stakes worth $1.6 billion. Nelson Peltz’s Trian Partners is the largest shareholder of the company, with a position worth $1.18 billion.
1. EnLink Midstream, LLC (NYSE:ENLC)
Dividend Yield as of May 6: 4.27%
Number of Hedge Fund Holders: 8
EnLink Midstream, LLC (NYSE:ENLC) is a Texas-based midstream energy company that deals in natural gas, crude oil, and natural gas liquids. The company also offers brine disposal services. EnLink Midstream, LLC (NYSE:ENLC)’s dividend yield on May 6 was 4.27%.
On April 19, EnLink Midstream, LLC (NYSE:ENLC) declared a $0.1125 per share quarterly dividend, in line with previous. The dividend is payable on May 13, to shareholders of the company as of the close of business on April 29.
EnLink Midstream, LLC (NYSE:ENLC) reported its Q1 results on May 3, posting earnings per share of $0.13, beating estimates by $0.03. Revenue for the period increased 78.44% year-over-year to $2.23 billion, surpassing analysts’ predictions by $493.15 million.
Raymond James analyst Justin Jenkins on May 4 reiterated an Outperform rating on EnLink Midstream, LLC (NYSE:ENLC) and raised the price target on the shares to $12 from $11 following the “impressive beat and raise” in Q1. The analyst believes EnLink Midstream, LLC (NYSE:ENLC)’s relative valuation should improve, resulting in an attractive total return value proposition.
According to Insider Monkey’s Q4 data, 8 hedge funds were bullish on EnLink Midstream, LLC (NYSE:ENLC), with combined stakes of $20.3 million. Ken Griffin’s Citadel Investment Group is the leading shareholder of the company, with 1.4 million shares worth $10 million.
You can also take a look at 10 LNG Shipping Stocks to Buy Now and 12 Best US Stocks to Buy Now.
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Disclosure: None. 10 Dividend Stocks For Beginners is originally published on Insider Monkey.
