In this article, we discuss 10 unstoppable dividend stocks to buy. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Unstoppable Dividend Stocks To Buy.
Dividend stocks faced a tough battle in 2023 to maintain their market position as tech stocks surged ahead. The S&P 500 Dividend Aristocrat Index, which seeks the performance of companies that have raised their payouts for 25 consecutive years or more, saw a 5.7% increase in 2023, compared with a 43% return of the tech-heavy NASDAQ index. However, amid market volatility, dividend investing is expected to make a comeback. Given that dividend payments from the S&P 500 surged to $588 billion in 2023, marking a 22% increase compared to three years ago, analysts are positive about this year’s dividend payments. In addition to this, as reported by The Economist, investors have allocated $316 billion into dividend-focused exchange-traded funds globally, nearly doubling their size in the past three years.
Analysts keeping tabs on dividend stocks has a lot more to do with Meta’s announcement of its first-ever dividend this year. While many dividend stocks have been consistently distributing dividends to their shareholders, the particular announcement about Meta was music to investors’ ears. The dividend notice led to a 20% surge in the stock’s share price, contributing nearly $200 billion to the company’s market cap on the day of the announcement. In addition to this, the company, having decreased its workforce by 22% in 2023, revealed intentions to conduct a $50 billion stock repurchase program. This move showed that the company possesses surplus funds, providing investors with a reason to stick around.
In fluctuating market conditions, maintaining cash reserves has consistently been a key focus for investors. Investors’ desire to secure reliable income streams also makes them gravitate toward dividend stocks. Companies that do not offer dividends have consistently underperformed dividend-paying stocks over time, especially in specific market conditions. For instance, during market downturns like the one observed in 2022, where the S&P 500 declined by over 18%, dividend-paying investments proved their ability to protect investors from substantial losses. In that year, stocks within the S&P 500 that paid dividends fell by just 11.1%, while those without dividends experienced a significantly larger loss of 38.7%.
Though this performance assessment reflects only a single year, a comprehensive long-term analysis indicated that dividend stocks are less volatile compared to other stock prices. In our article titled 25 Things Every Dividend Investor Should Know, we referred to Wisdom Tree’s data and highlighted that stock prices are more than twice as volatile as dividend stocks. The firm conducted an examination spanning 64 years, revealing that there were only six instances within this timeframe when dividends decreased, with only one of those instances witnessing a decline of over 5%. In comparison, stock prices experienced declines in 18 of those years, with the most severe yearly decline surpassing 40%. The report further mentioned that, on average, stocks experienced an annual decline of more than 11% during this period.
AbbVie Inc. (NYSE:ABBV), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some of the best dividend stocks, offering consistent growth in dividend payments. In this article, we will take a look at some unstoppable stocks that pay dividends to shareholders.
Photo by Nicholas Cappello on Unsplash
Our Methodology:
For this article, we first used a stock screener to identify stocks that have reported positive returns in 2024 so far. From this selection, we chose dividend stocks with year-to-date (YTD) gains of at least 15%, as of the close of April 7. The stocks were then arranged in ascending order of their YTD gains. We also mentioned hedge fund sentiment data for these stocks using Insider Monkey’s database of 933 hedge funds as of Q4 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
10. Occidental Petroleum Corporation (NYSE: OXY)
Year-to-Date Gains as of April 7: 15.32%
Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based multinational energy company that deals in the production and exploration of oil and natural gas. In the fourth quarter of 2023, the company reported a strong cash position with its operating cash flow for the period of roughly $4 billion. Its free cash flow for the quarter amounted to over $1.1 billion. The company also returned $321 million to shareholders through dividends.
Occidental Petroleum Corporation (NYSE:OXY) declared a 22% hike in its quarterly dividend on February 8 to $0.22 per share. This was the company’s third consecutive year of dividend growth. The stock’s dividend yield on April 8 came in at 1.27%. With year-to-date gains of 15.32%, OXY is one of the unstoppable stocks on our list. It can be added to dividend portfolios alongside AbbVie Inc. (NYSE:ABBV), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
At the end of Q4 2023, 66 hedge funds in Insider Monkey’s database reported having stakes in Occidental Petroleum Corporation (NYSE:OXY), down from 75 in the previous quarter. The consolidated value of these stakes is over $17.4 billion. Among these hedge funds, Berkshire Hathaway was the company’s leading stakeholder in Q4.
9. Domino’s Pizza, Inc. (NYSE:DPZ)
Year-to-Date Gains as of April 7: 19.3%
Domino’s Pizza, Inc. (NYSE:DPZ) is an American restaurant chain company that specializes in the production, marketing, and delivery of pizzas. The company hiked its quarterly dividend by 24.8% in February this year and now pays a quarterly dividend of $1.51 per share. Through this increase, the company stretched its dividend growth streak to 12 years, which makes DPZ one of the unstoppable stocks on our list. The stock offers a dividend yield of 1.22%, as of April 8.
In the fourth quarter of 2023, Domino’s Pizza, Inc. (NYSE:DPZ) reported revenue of $1.4 billion, which showed a 0.77% growth from the same period last year. The company’s operating cash flow for 2023 came in at $591 million and its free cash flow for the period was $485.5 million.
The number of hedge funds tracked by Insider Monkey owning stakes in Domino’s Pizza, Inc. (NYSE:DPZ) jumped to 43 in Q4 2023, from 31 in the previous quarter. These stakes are collectively valued at nearly $1.5 billion. Coatue Management was the largest stakeholder of the company in Q4.
8. Target Corporation (NYSE:TGT)
Year-to-Date Gains as of April 7: 20.03%
Target Corporation (NYSE:TGT) is next on our list of unstoppable stocks with year-to-date gains of 20.03%, as of April 7. The American retail company has been growing its dividends for the past 52 years and offers a quarterly dividend of $1.10 per share. As of April 8, the stock has a dividend yield of 2.56%.
In 2023, Target Corporation (NYSE:TGT) generated nearly $32 billion in revenues, up 1.67% from the last year. The company’s operating cash flow came in at $8.6 billion, up from $4 billion in 2022. In the fourth quarter of 2023, it distributed $508 million worth of dividends to shareholders.
As of the end of Q4 2023, 58 hedge funds tracked by Insider Monkey held investments in Target Corporation (NYSE:TGT), which remained the same as in the previous quarter. The total value of these stakes is over $1.5 billion. With over 2.8 million shares, Diamond Hill Capital was the company’s leading stakeholder in Q4.
Diamond Hill Capital mentioned Target Corporation (NYSE:TGT) in its Q4 2023 investor letter. Here is what the firm has to say:
Other top contributors in Q4 included Allstate, American International Group (AIG) and Target Corporation (NYSE:TGT). US-based mass retailer Target is capitalizing on cleaner inventory, lower freight costs and improved efficiency to improve profitability — and investors rewarded shares accordingly in Q4.
7. Barclays PLC (NYSE:BCS)
Year-to-Date Gains as of April 7: 22.9%
Barclays PLC (NYSE:BCS) is a multinational financial services company that offers a wide range of related products and services to its consumers. In FY23, the company returned £3 billion to shareholders through dividends, reflecting a 37% growth from the previous year. It currently offers an annual dividend of 5.3p with a dividend yield of 5.51%, as of April 8. Since the start of 2024, the stock has delivered a 22.9% return, which makes BCS one of the unstoppable stocks on our list.
At the end of December 2023, 17 hedge funds in Insider Monkey’s database held stakes in Barclays PLC (NYSE:BCS), up from 13 in the previous quarter. These stakes have a consolidated value of over $334.7 million.
6. NatWest Group plc (NYSE:NWG)
Year-to-Date Gains as of April 7: 27.01%
NatWest Group plc (NYSE:NWG) ranks sixth on our list of unstoppable dividend stocks to buy. The stock has gained 27.01% this year so far and its 12-month returns came in at 5.30%. The British private banking and insurance company currently offers a semi-annual dividend of $0.1386 per share and has a dividend yield of 5.99%, as recorded on April 8. It has been rewarding shareholders with regular dividends since 2018.
In FY23, NatWest Group plc (NYSE:NWG)’s total income came in at £14.3 billion, up 9.8% from the same period last year. The company’s cash generation for the year remained strong as it paid £3.6 billion to shareholders through dividends.
As of the end of December 2023, 11 hedge funds held stakes in NatWest Group plc (NYSE:NWG), up from 8 in the previous quarter, as per Insider Monkey’s database. The overall value of these stakes is more than $9.6 million. Ken Griffin’s Citadel Investment Group was the company’s largest stakeholder in Q4.
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Disclosure. None. 10 Unstoppable Dividend Stocks To Buy is originally published on Insider Monkey.
