10 Dividend Stocks to Buy and Hold

Published on November 26, 2021 at 9:58 am by Fatima Farooq in Hedge Funds, News

In this article, we will be taking a look at 10 dividend stocks to buy and hold.

Apart from typical blue chip stocks like Amazon.com, Inc. (NASDAQ:AMZN), Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), dividend stocks can also be looked at as a smart investment vehicle. A recent Global X report shows why, by primarily looking at higher-yielding dividend stocks. The report focuses on the expected performance of dividend stocks in rising rate environments. It builds its conclusions on strong evidence collected by observing the performance of said stocks from 1960 to 2017, lending the report great credibility.

Based on intuition, it can be seen that rising interest rates in the US can lead to investor concern when it comes to the market. As such, many are drawn to dividend stocks as active hedges in their portfolios. The report found evidence to back up this perception of dividend stocks as good investments in rising interest rate environments particularly when they are higher-yielding stocks. High dividend stocks were reported to have generated an average annual dividend yield of 6.4%, firstly.

Secondly, the total return of these stocks also outperformed the S&P 500 by about 3% on an annualized basis. And lastly, in 7 interest rate periods out of the 10 under study since 1960, these dividend stocks were also overwhelmingly outperforming the S&P 500 as a matter of fact.

When considering whether or not it’s still profitable to invest in dividend stocks, one can often be at a standstill. However, a recent Reuters analysis of Refinitiv data shows that about 3,394 global companies will be paying out about $1.37 trillion to their shareholders in dividends in 2021. The companies all have market capitalization of at least $1 billion. Of these companies and their dividends, US dividends are expected to see an 8.6% increase in 2021, growing to about $562.3 billion.

Hence, despite the slow growth and even the downfall of dividend stocks in 2020 and throughout the COVID-19 pandemic, it can now be said that dividend stocks are beginning to regain their charm and their profitability for individual shareholders.

Apart from what’s already been stated, more evidence to substantiate this claim comes from Janus Henderson’s statements in a November report that 90% of global companies raised their dividends or held them steady so far in 2021. The report also mentioned that these global companies delivered about $403.5 billion in the third quarter of 2021, showcasing a 22% increase compared to the amount generated in the third quarter of 2020.

Photo by Vitaly Taranov on Unsplash

Without further ado, let’s take a look at the 10 dividend stocks to buy and hold.

Our Methodology

Insider Monkey tracks the data of about 867 hedge funds as of the third quarter of 2021, and we have used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield and the number of hedge funds having stakes in it, ranking them from the lowest to the highest number of hedge funds.

Dividend Stocks to Buy and Hold

10. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 61

Dividend Yield: 2.6%

PepsiCo, Inc. (NASDAQ:PEP) is a global food and beverage company operating in the consumer staples sector. Founded in 1898, the company has since established itself as one of the most renowned multinational companies in existence, with analyst Sean King from UBS commenting that its financial year of 2022 outlook demonstrates not only an accelerating revenue but also a defensive earnings model. Comments like this, made just this October, show that the company is a dividend stock to buy and hold.

Barclays analyst Lauren Lieberman hold an Overweight rating on shares of PepsiCo, Inc. (NASDAQ:PEP) as of this October, alongside a raised price target of $168.

In the third quarter of 2021, PepsiCo, Inc. (NASDAQ:PEP) had an EPS of $1.79, beating estimates by $0.06. The company’s revenue was $20.19 billion, up 11.60% year over year and beating estimates by $797.43 million. PepsiCo, Inc. (NASDAQ:PEP) has gained 10.48% in the past six months and 13.22% year to date.

By the end of the third quarter of 2021, 61 hedge funds out of the 867 tracked by Insider Monkey held stakes in PepsiCo, Inc. (NASDAQ:PEP) worth roughly $4.4 billion. This is compared to 66 hedge funds in the previous quarter with a total stake value of approximately $5.2 billion.

Like Amazon.com, Inc. (NASDAQ:AMZN), Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), PepsiCo, Inc. (NASDAQ:PEP) is gaining a lot of attention from elite hedge funds.

9. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 61

Dividend Yield: 3.04%

The Coca-Cola Company (NYSE:KO) is another consumer staples company specializing in the production and distribution of beverages. The company is based in Atlanta and is among the top dividend stocks to buy and hold, because it has demonstrated dividend stability and increases for the past 59 years in a row. Some of its brands include Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, Fanta, Sprite, and Fresca.

Dara Mohsenian, an analyst at Morgan Stanley, reiterated an Overweight rating on shares of The Coca-Cola Company (NYSE:KO) this November. The analyst also holds a $65 price target on the stock.

The earnings history of The Coca-Cola Company (NYSE:KO) shows that the company had an EPS of $0.65 in the third quarter, beating estimates by $0.07. The company’s revenue was $10.04 billion, up 16.14% year over year and beating estimates by $32.89 million. The Coca-Cola Company (NYSE:KO) has also gained about 1.17% in the past six months and 5.06% year to date.

Our data shows 61 hedge funds holding stakes in The Coca-Cola Company (NYSE:KO) in the third quarter, worth $25.1 billion. In the second quarter, 62 hedge funds held stakes in the company worth $24.9 billion, in comparison.

8. Medtronic plc (NYSE:MDT)

Number of Hedge Fund Holders: 62

Dividend Yield: 2.2%

Medtronic plc (NYSE:MDT) is a healthcare equipment company distributing and selling device-based medical therapies. The company is based in Dublin, Ireland, and was founded in 1949. Its main operational segments include the Cardiovascular Portfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and Diabetes Operating Unit segments. Having raised its dividend yield for 44 years in a row, and being among the dividend aristocrats, the company is undoubtedly a dividend stock to buy and hold.

As of this November, David Rescott from Truist holds a Buy rating on shares of Medtronic plc (NYSE:MDT). The analyst’s price target on the stock is $142.

For the fiscal second quarter of 2022, Medtronic plc’s (NYSE:MDT) reported EPS was $1.32, beating estimates by $0.03. The company’s revenue was $7.85 billion, up 2.62% year over year. Medtronic plc (NYSE:MDT) has also gained about 1% in the past year.

Insider Monkey’s hedge fund data on 867 hedge funds for the third quarter shows that 62 hedge funds held stakes in Medtronic plc (NYSE:MDT) in the third quarter, worth about $2.3 billion. Comparatively in the second quarter, 68 hedge funds held stakes in the company worth about $3.4 billion.

Like Amazon.com, Inc. (NASDAQ:AMZN), Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), Medtronic plc (NYSE:MDT) is a noteworthy stock many investors are piling into today.

7. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 64

Dividend Yield: 5.6%

Exxon Mobil Corporation (NYSE:XOM) is a natural gas company based in the US and operating multinational in the oil and gas industries. The Texas-based corporation is the largest descendant of John D. Rockefeller’s Standard Oil. It is renowned as one of the best dividend stocks to buy and hold, having raised its yield for 39 years in a row, and was formed in 1999 through the merger of Exxon and Mobil.

With an $84 price target, Morgan Stanley analyst Devin McDermott hold an Overweight rating on Exxon Mobil Corporation (NYSE:XOM) shares as of this October.

The company’s third quarter earnings report shows an EPS of $1.58. The EPS beat estimates by $0.06. Exxon Mobil Corporation (NYSE:XOM) also has a revenue of $73.79 billion, up 59.71% year over year and beating estimates by $2.09 billion. Exxon Mobil Corporation (NYSE:XOM) has gained about 8.96% in the past six months and 52.96% year to date as well.

Out of 867 hedge funds, 64 held stakes in Exxon Mobil Corporation (NYSE:XOM) in the third quarter of 2021. Comparatively, in the second quarter, 68 hedge funds held stakes in the company. The total stake values for both quarters were $4.6 billion and $3.7 billion respectively.

6. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 66

Dividend Yield: 8.5%

AT&T Inc. (NYSE:T) is renowned as one of the top global corporations providing communication services and related products and services. The company is also heralded as being among the top dividend stocks to buy and hold because of its recent business improvements in October. The company reported customer gains at the time, 70% of which were new. It is an American multinational conglomerate holding company and is also the largest provider of mobile telephone services in the US.

KeyBanc analysts upgraded shares of AT&T Inc. (NYSE:T) this October from Underweight to Sector Weight.

The company’s earnings history shows an EPS of $0.87, beating estimates by $0.08, for the third quarter. The revenue stood at $39.92 billion.

According to our data, 66 hedge funds out of 867 held stakes in AT&T Inc. (NYSE:T) in the third quarter, worth about $3.2 billion. The number of hedge funds holding stakes in the company in the second quarter, by comparison, was 68. The total stake value in the second quarter was $2.9 billion.

Like Amazon.com, Inc. (NASDAQ:AMZN), Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), AT&T Inc. (NYSE:T) is a popular stock among investors today.

5. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 69

Dividend Yield: 2.4%

The Procter & Gamble Company (NYSE:PG) is another consumer staples company on our list, and an American multinational corporation based in Cincinnati, Ohio. The company was founded in 1837 and is one of the best dividend stocks to buy and hold, having raised its yield consecutively for 65 years.

Deutsche Bank analyst Steve Powers holds a Buy rating on shares of The Procter & Gamble Company (NYSE:PG) as of this October, alongside a price target of $160.

In the fiscal first quarter of 2022, The Procter & Gamble Company (NYSE:PG) had an EPS of $1.61, beating estimates by $0.02. The company’s revenue was $20.34 billion, up 5.28% year over year and beating estimates by $445.19 million. The Procter & Gamble Company (NYSE:PG) has also gained 7.39% in the past six months and 7.87% year to date.

From Insider Monkey’s tracked hedge funds, 69 held stakes in The Procter & Gamble Company (NYSE:PG) in the third quarter worth about $64 billion. In the second quarter in comparison, 68 hedge funds held stakes in the company worth about $69 billion.

4. Bristol Myers Squibb Company (NYSE:BMY)

Number of Hedge Fund Holders: 74

Dividend Yield: 3.5%

Bristol Myers Squibb Company (NYSE:BMY) is a company operating in the pharmaceuticals industry, based in New York. The company is among the largest of its kind in the world, and is reportedly consistently ranked on the Fortune 500 list of the largest US corporation. It is among the best dividend stocks to buy and hold, having raised its dividend yield for 73 years in a row.

BMO Capital analyst Evan Seigerman holds an Outperform rating on shares of Bristol Myers Squibb Company (NYSE:BMY) as of this November. The analyst also holds a $72 price target on the stock.

For the third quarter, it was reported that Bristol Myers Squibb Company (NYSE:BMY) had an EPS of $2, beating estimates by $0.08. The company’s revenue was $11.62 billion, up 10.28% year over year and beating estimates by $100.06 million.

Our data on 867 hedge funds shows that in the third quarter of 2021, 74 hedge funds held stakes in Bristol Myers Squibb Company (NYSE:BMY) worth $4.8 billion. In the second quarter, 73 hedge funds held stakes in the company worth $5.2 billion.

3. Merck & Company Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 77

Dividend Yield: 3.2%

Merck & Company Inc. (NYSE:MRK) is another pharmaceutical company on our list and is based in New Jersey. The company is one of the most noteworthy dividend stocks to buy and hold, based on future prospects for the company. For instance, analyst David Toung from Argus expects a $5 billion to $7 billion revenue for the company in 2022 based on business opportunities.

Robyn Karnauskas, an analyst at Truist, holds a Buy rating on shares of Merck & Company Inc. (NYSE:MRK) as of this November. The analyst also holds a $95 price target on the stock.

Merck & Company Inc.’s (NYSE:MRK) third quarter earnings report shows an EPS of $1.75, beating estimates by $0.20. The company’s revenue was $13.15 billion, up 4.80% year over year and beating estimates by $833.53 million. Merck & Company Inc. (NYSE:MRK) has also gained 11.34% in the past six months and 6.58% year to date.

Insider Monkey’s hedge fund data shows that 77 hedge funds held stakes in Merck & Company Inc. (NYSE:MRK) in the third quarter of 2021. The total stake value was $4.6 billion. In the second quarter, 79 hedge funds held stakes in the company, worth about $5.3 billion.

2. AbbVie Inc (NYSE:ABBV)

Number of Hedge Fund Holders: 81

Dividend Yield: 4.8%

AbbVie Inc (NYSE:ABBV) is a publicly-traded biopharmaceuticals corporation. The company was founded not long ago, in 2013, and originated as an Abbott Laboratories spinoff. Regardless, because of its continued dividend hikes for 50 years in a row, it is now among the top dividend stocks to buy and hold.

Robyn Karnauskas from Truist also raised the price target on shares of AbbVie Inc (NYSE:ABBV), while reiterated a Buy rating on the stock as of this November.

The earnings history for AbbVie Inc (NYSE:ABBV) shows that in the third quarter, the company had an EPS of $3.33, beating estimates by $0.11. The revenue reported was $14.34 billion, up 11.33% year over year and beating estimates by $43.28 million. AbbVie Inc (NYSE:ABBV) has also gained 3.58% in the past six months and 12.57% year to date.

Our hedge fund data collected by tracking 867 hedge funds shows that 81 hedge funds held stakes in AbbVie Inc (NYSE:ABBV) in the third quarter of 2021, worth $4.1 billion. The number of hedge funds holding stakes in the company in the second quarter was 82, worth about $5.4 billion.

1. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Dividend Yield: 2.7%

Johnson & Johnson (NYSE:JNJ) is another healthcare or medical company on our list and is among the most popular dividend stocks to buy and hold today, having raised its yield for 59 years consecutively. The company was among the first to come up with an effective vaccine against the coronavirus pandemic as well.

Jayson Bedford from Raymond James holds an Outperform rating on shares of Johnson & Johnson (NYSE:JNJ) as of this October.

The company’s quarterly reports for the third quarter show an EPS of $2.60, beating estimates by $0.25. The revenue was $23.34 billion, up 10.70% year over year and beating the previous quarter’s revenue of $23.31 billion. Johnson & Johnson (NYSE:JNJ) has also gained about 2.39% year to date and 11.53% in the past year.

In the third quarter of 2021, 88 hedge funds held stakes in Johnson & Johnson (NYSE:JNJ) worth about $6.9 billion. The number of hedge funds holding stakes in the company in the second quarter was the same, at 88, and the stake value was $7.1 billion approximately.

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10 Dividend Stocks to Buy and Hold

Published on November 26, 2021 at 9:58 am by Fatima Farooq in Hedge Funds, News