In this article, we will take a look at the 10 Innovative Dividend Stocks to Buy Right Now.
According to a report by CMC Markets, research continues to show that stocks of innovative companies tend to outperform those of less innovative peers. Data from GlobalData highlights this trend. Its Innovation Indices have delivered an annualised alpha of 3–8%. This aligns with findings from Boston Consulting Group, which show that innovative firms have a 2.2x higher future earning potential.
The effect is more visible in areas like artificial intelligence. GlobalData’s AI Innovation Index has outperformed the S&P 500 with an 8.5% annualised alpha. Long-term data support the same pattern. GlobalData indices have shown stronger performance for innovative companies over 1, 3, and 5-year periods. Studies from McKinsey & Company also point in the same direction, and found that the most innovative companies delivered shareholder returns well above industry medians between 2012 and 2022.
BCG’s 2023 report showed that the top 50 innovative companies outperformed the MSCI World Index by an average of 3.3 percentage points per year. BCG’s research also points to a shift in how companies approach growth. A group of forward-looking firms is placing innovation at the center of strategy. These companies are increasing spending on incremental improvements while also allocating about one-third of their investment to breakthrough innovations. They are using a range of tools to strengthen innovation capabilities. This includes active M&A strategies aimed at acquiring new technologies and talent.
When evaluating a company, these actions often point to a forward-looking growth strategy. They can also serve as indicators of an innovation-focused business.
Given this, we will take a look at some of the best dividend stocks from innovative companies.
Photo by Scott Graham on Unsplash
Our Methodology
For this list, we screened for companies that actively prioritize and promote the development of new and groundbreaking ideas, products, services, or business processes. From there, we picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 56
On April 27, Bank of America raised its price recommendation on Hewlett Packard Enterprise Company (NYSE:HPE) to $38 from $32. It reiterated a Buy rating on the shares. The analyst pointed to the next phase of AI shifting toward agentic systems. In that context, both Dell Technologies and HPE are expected to see stronger demand for AI servers and storage. At the same time, the traditional server business remains important. The analyst noted that higher valuation multiples are being applied to both companies, reflecting expected upside from demand across AI infrastructure and conventional compute.
HPE is recognized as one of the three key innovators behind the invention of inkjet printers, a major step forward in printing technology. The company introduced the first programmable pocket calculator. It also contributed to the development of the atomic clock, which can align global time with precision down to one-millionth of a second.
Hewlett Packard Enterprise Company (NYSE:HPE) operates as a global technology provider focused on intelligent solutions. Its platforms help customers capture, analyze, and act on data from edge to cloud. The customer base ranges from small and medium-sized businesses to large enterprises and government organizations.
9. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 62
On April 22, RBC Capital Markets analyst Deane Dray lowered the firm’s price target on 3M Company (NYSE:MMM) to $133 from $134 and kept an Underperform rating on the shares. The analyst said the company delivered a modest and low-quality Q1 operating beat. He pointed to FX tailwinds and higher-than-expected corporate income as key drivers. He also noted that customer pre-buying ahead of price increases, aimed at offsetting oil-related inflation, contributed to double-digit order growth, the analyst tells investors in a research note. RBC added that operational excellence metrics continue to improve. The firm also highlighted a pipeline of new product launches.
3M Company is widely known for inventing Post-it Notes. They are now used across offices, classrooms, and homes around the world. The company introduced Scotch tape in 1930. It was originally designed to seal cellophane food wrappers. Over time, the product gained widespread use. It became a common tool for everyday tasks, from gift wrapping to basic household fixes.
3M Company (NYSE:MMM) operates as a diversified technology company. It manufactures and markets a wide range of products and services. Its segments include Safety and Industrial, Transportation and Electronics, and Consumer.
Hedge Fund Resource Center