In this article, we will take a look at some of the best dividend stocks under $100.
Dividend stocks hold strong appeal for income generation for two main reasons. First, their regular payouts help investors address immediate liquidity needs. Second, historical trends indicate that dividend-paying stocks can help reduce market volatility and limit losses during downturns. Companies with a track record of dividend growth often provide added stability during bearish markets. For instance, between December 31, 1999, and March 31, 2022, during periods of market decline, the High Yield Dividend Aristocrats index outperformed the Composite 1500 and the High Dividend Index, delivering an average monthly outperformance of 140 and 49 basis points, respectively.
Investing in dividend stocks has always been a tug-of-war between those favoring high yields and those backing dividend growth. Analysts suggest that due to economic volatility since 2020 and ongoing market uncertainties impacting corporate earnings, high-yield companies without strong financial stability and discipline may struggle to maintain their dividend payouts. This could leave them at risk of dividend cuts or suspensions. In contrast, dividend growth strategies have proven effective in both rising and falling interest rate environments. According to a report by ProShares, the Dividend Aristocrats index, which tracks companies with at least 25 years of consistent dividend growth, achieved a 14.26% return during the period of declining interest rates from May 2005 to March 2024, outperforming high-yield stocks, which delivered just over 10%. Similarly, during periods of rising interest rates within the same timeframe, dividend growth stocks returned 10.26%, compared to 9.22% for high-yield stocks.
Also read: 10 Extreme Dividend Stocks to Invest in Now
That said, high-yield stocks aren’t entirely off the table. While analysts warn investors about the financial stability of high-yield companies, these stocks have historically delivered solid returns. The research from The Wellington study analyzed the broader market’s dividend-paying stocks from 1930 to 2019, dividing them into five categories based on their dividend yields. The top 20% of dividend payers outshone the rest, with the moderate dividend group also surpassing the broader market in several periods. However, stocks with lower dividend yields showed less consistent performance compared to the broader index.
Kirsten Cabacungan, an investment strategist at Merrill and Bank of America Private Bank, encouraged investors to focus on both price appreciation and dividend income when evaluating total returns. She highlighted that dividend-paying stocks bring added advantages, as their steady income can help cushion losses during market downturns, offering stability to a portfolio. Moreover, during periods of low interest rates, these stocks often provide higher income compared to options like Treasury bonds, CDs, or corporate bonds. Here are some other comments from the analyst:
“Companies that have consistently increased their dividends tend to be more stable, higher quality businesses, which historically have weathered downturns and are more likely to have the ability to pay dividends consistently.”
Cabacungan advised that investors looking for steady income might benefit from focusing on stocks with above-average dividend yields held over the long term. On the other hand, those prioritizing growth without the need for immediate income should consider stocks with a history of steadily increasing dividends. This strategy aligns with a growth-focused approach, enabling investors to capitalize on companies that consistently enhance their dividends as their profits and cash flows expand. Given this, we will take a look at some of the best high-yield stocks under $100.
Photo by Dan Dennis on Unsplash
Our Methodology:
For this list, we first used a stock screener to identify dividend-paying stocks priced below $100 and offering dividend yields above 4% as of January 24. From that selection, we chose 12 companies with strong dividend histories and ranked them in ascending order of hedge funds’ sentiment toward them, according to Insider Monkey’s database of Q4 2023.
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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
12. Universal Corporation (NYSE:UVV)
Number of Hedge Fund Holders: 14
Dividend Yield as of January 24: 6.39%
Share Price as of January 24: $50.71
Universal Corporation (NYSE:UVV) is a global leaf tobacco supplier that operates in various segments of the tobacco industry, including procuring, processing, packaging, storing, and shipping leaf tobacco.
Universal Corporation (NYSE:UVV) reported strong earnings in its fiscal Q2 2025 report. This performance was driven by strong customer demand in its Tobacco Operations segment and larger, higher-quality crops with better yields from Africa. The segment is anticipated to sustain its solid results through the second half of the fiscal year. Meanwhile, the company has been growing Universal Ingredients’ market presence, attracting interest from both new and existing customers despite challenges from rising food costs. The recently expanded ingredients facility is expected to boost production and significantly contribute to fiscal year 2026 results.
Universal Corporation (NYSE:UVV) posted revenue of nearly $711 million. Looking ahead, the company plans to focus on optimizing its tobacco business, growing the ingredients segment, and identifying opportunities for collaboration between the two areas. In addition, its cash position also remained solid as the company had approximately $80 million available in cash at the end of the quarter.
Universal Corporation (NYSE:UVV) is one of the best dividend stocks on our list as the company has been growing its payouts for 54 consecutive years. The company offers a quarterly dividend of $0.81 per share and has a dividend yield of 6.39%, as of January 24.
At the end of Q3 2024, 14 hedge funds tracked by Insider Monkey held stakes in Universal Corporation (NYSE:UVV), up from 12 in the previous quarter. These stakes have a total value of nearly $72 million. Among these hedge funds, Pzena Investment Management was the company’s leading stakeholder in Q3.
11. Spire Inc. (NYSE:SR)
Number of Hedge Fund Holders: 20
Dividend Yield as of January 24: 4.51%
Share Price as of January 24: $69.65
Spire Inc. (NYSE:SR) is a Missouri-based energy company that operates primarily in the natural gas industry. The company provides natural gas service to residential, commercial, industrial, and wholesale customers across several states in the US. In the FY24 earnings call, the company stated that growth in its gas utilities throughout the year was driven by substantial infrastructure investments and enhanced operational efficiency. In addition, the Gas Marketing and Midstream segments consistently delivered strong performance. The company emphasized its ongoing commitment to executing its strategy, prioritizing capital-driven growth and operational excellence. In the past 12 months, the stock has surged by over 17%.
In the fourth quarter of 2024, Spire Inc. (NYSE:SR) reported revenue of $293.8 million, down 5% from the same period last year. For FY24, the company reported a net income of $250.9 million, or $4.19 per share, up from $217.5 million, or $3.85 per share, in fiscal 2023. It has set a long-term adjusted earnings per share growth target of 5–7%, using the initial fiscal 2024 guidance midpoint of $4.35 per share as a baseline. The company’s 10-year capital investment plan, totaling $7.4 billion through fiscal 2034, is primarily focused on infrastructure improvements and new business development within its Gas Utilities segment, which accounts for 98% of the planned investments. For fiscal 2025, capital expenditures are projected to reach $790 million.
Spire Inc. (NYSE:SR) is a reliable dividend payer as the company holds a strong cash position. It ended the quarter with $4.5 million available in cash and cash equivalent and generated $912.4 million in operating cash flow in fiscal 2024. The company has paid regular dividends to shareholders since 1946. In November 2024, it declared a 4% hike in its quarterly dividend to $0.785 per share. This marked the company’s 22nd consecutive year of dividend growth, which makes SR one of the best dividend stocks on our list. As of January 24, the stock has a dividend yield of 4.51%.
The number of hedge funds tracked by Insider Monkey owning stakes in Spire Inc. (NYSE:SR) grew to 20 in Q3 2024, from 16 in the previous quarter. These stakes have a consolidated value of $73.7 million. Millennium Management was the company’s leading stakeholder in Q3.
10. W. P. Carey Inc. (NYSE:WPC)
Number of Hedge Fund Holders: 23
Dividend Yield as of January 24: 6.37%
Share Price as of January 24: $55.26
W. P. Carey Inc. (NYSE:WPC) is an American real estate investment trust company that specializes in the ownership and management of commercial real estate properties. The company began 2024 on a less-than-ideal note by announcing a dividend reduction, a move that caught many investors off guard. However, it closed the year on a strong footing, reporting record transaction volumes in the final quarter and entering 2025 on a much more optimistic note. The stock has declined by over 13% in the past 12 months.
W. P. Carey Inc. (NYSE:WPC)’s dividend cut was largely a result of the decision to divest its office property holdings, which at the time accounted for 16% of its rental income. This strategic shift left the REIT with little option but to lower its dividend. For many income-focused investors, a dividend reduction often places a company in the “un-investable” category. That said, the company has raised its payouts twice since the dividend cut.
W. P. Carey Inc. (NYSE:WPC)’s balance sheet has gotten stronger over the years. In the most recent quarter, the company had over $818 million available in cash and cash equivalents, up from $633.8 million at the end of 2023. Though the company’s 24-year dividend growth streak was broken with its dividend cut, its payouts remained regular since 1998. It currently pays a quarterly dividend of $0.88 per share and has a dividend yield of 6.37%, as of January 24.
As of the close of Q3 2024, 23 hedge funds in Insider Monkey’s database owned stakes in W. P. Carey Inc. (NYSE:WPC), the same as in the previous quarter. These stakes have a total value of nearly $220 million.
9. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 23
Dividend Yield as of January 24: 5.83%
Share Price as of January 24: $54.34
Realty Income Corporation (NYSE:O) ranks ninth on our list of the best dividend stocks under $100. The American real estate investment trust company invests in single-tenant commercial properties in the country. The company has been grabbing investors’ attention because of its stellar performance historically. Over the past three decades, the company has demonstrated remarkable resilience, successfully navigating significant challenges such as the dot-com crash, the Great Recession, and the COVID-19 pandemic, all while steadily increasing its dividend. Even at the height of the Great Recession, the company’s occupancy rates never fell below 96.6%, and they currently stand at approximately 98.7%. This consistent performance underscores its stability, even in tough economic times.
Realty Income Corporation (NYSE:O) focuses on acquiring commercial properties, leasing them out, and distributing the rental income to its investors. By the close of Q3 2024, it owned 15,457 properties across all 50 U.S. states, the U.K., and six European nations, marking an increase from 13,458 properties at the end of 2023. This expansion was largely fueled by its acquisition of Spirit Realty in January 2024. The company primarily rents its properties to retail businesses that tend to perform well even during economic slowdowns.
A major contributor to this reliability is Realty Income Corporation (NYSE:O)’s solid financial foundation, supported by an investment-grade balance sheet. Its substantial size also allows easier access to capital markets, enabling the company to secure favorable debt terms to fuel its growth. In addition, the company pays monthly dividends to shareholders. It has raised its payouts regularly since it went public in 1994. Currently, it offers a monthly dividend of $0.264 per share and has a dividend yield of 5.83%, as of January 24.
According to Insider Monkey’s database of Q3 2024, 23 hedge funds, growing from 19 in the previous quarter, held stakes in Realty Income Corporation (NYSE:O). These stakes have a consolidated value of more than $163.5 million in total. With over 1.7 million shares, AEW Capital Management was the company’s leading stakeholder in Q3.
8. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 25
Dividend Yield as of January 24: 6.37%
Share Price as of January 24: $33.57
Enterprise Products Partners L.P. (NYSE:EPD) is a Texas-based midstream natural gas and crude oil pipeline company that offers petrochemicals and related products. The company maintains a positive outlook, but a significant challenge for Enterprise and other carbon energy businesses is the rise of clean energy. While this poses a genuine long-term threat, the transition is expected to unfold over several decades. Despite the growth of alternative energy, demand for oil—and especially natural gas, a major focus for Enterprise—is anticipated to stay strong in the near future. Carbon-based fuels remain essential to the global economy, making it unlikely that their usage will cease abruptly. In the past year, the stock has surged by nearly 24%.
Enterprise Products Partners L.P. (NYSE:EPD) has gained attention from investors for its solid cash performance. In the most recent quarter, the company reported an operating cash flow of $2.1 billion, which showed a 4% increase compared to the previous year. Distributable cash flow also rose by 5%, reaching $2 billion for the quarter. Over the 12 months ending September 30, 2024, Enterprise allocated 56% of its Adjusted Cash Flow from Operations (CFFO) toward distributions to common unitholders and the repurchase of partnership common units.
On January 8, Enterprise Products Partners L.P. (NYSE:EPD) reported a 1.9% hike in its quarterly dividend to $0.535 per share. Through this increase, the company stretched its dividend growth streak to 27 years, which makes EPD one of the best dividend stocks on our list. The stock supports a dividend yield of 6.37%, as of January 24.
According to Insider Monkey’s database, 25 hedge funds owned stakes in Enterprise Products Partners L.P. (NYSE:EPD), up from 23 a quarter earlier. These stakes are worth roughly $316 million in total. Among these hedge funds, Fairholme (FAIRX) was the company’s leading stakeholder in Q3.
7. Agree Realty Corporation (NYSE:ADC)
Number of Hedge Fund Holders: 26
Dividend Yield as of January 24: 4.23%
Share Price as of January 24: $71.83
An American real estate investment trust company, Agree Realty Corporation (NYSE:ADC) ranks seventh on our list of the best high-dividend stocks under $100. The company is regarded as a leading player in the retail sector. Its key tenants include major retailers such as Walmart, Tractor Supply, Dollar General, Best Buy, TJX, Dollar Tree, Lowe’s, and Kroger, collectively contributing about one-third of the REIT’s annual rental income. The remaining two-thirds come from other resilient businesses. The stock has delivered a 21.5% return in the past 12 months.
As of September, Agree Realty Corporation (NYSE:ADC) maintained a remarkable occupancy rate of 99.6% across its properties. In the third quarter of 2024, the company reported revenue of $154.3 million, reflecting nearly 13% year-over-year growth. In addition, the company invested around $237 million in 93 retail net lease properties during the quarter.
Agree Realty Corporation (NYSE:ADC) is efficiently managed, with tenants covering the majority of the property’s operating expenses. Over the last ten years, the company has achieved impressive growth, increasing its dividend by about 6% annually. Its portfolio has also expanded substantially, rising from 130 properties in late 2013 to 2,271 properties by the close of the third quarter of 2024. On January 14, the company declared a monthly dividend of $0.253 per share and has a dividend yield of 4.23%, as of January 24. It can be a reliable investment option for income investors as the company has been paying regular dividends since its IPO in 1994.
The number of hedge funds tracked by Insider Monkey owning stakes in Agree Realty Corporation (NYSE:ADC) grew to 26 in Q3 2024, from 23 in the previous quarter. These stakes are worth roughly $565 million in total.
6. Cogent Communications Holdings, Inc. (NASDAQ:CCOI)
Number of Hedge Fund Holders: 27
Dividend Yield as of January 24: 5.26%
Share Price as of January 24: $75.70
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is a Washington-based multinational internet service provider company that offers services related to internet access and data transport. The company is close to finalizing a major network overhaul that started over 18 months ago, focused on creating a custom-designed wavelength network. This extensive project has included substantial upgrades across its entire infrastructure to support efficient any-to-any data center connectivity. A key aspect of this transformation is the integration of a ROADM-enabled network at key metro hubs and regeneration points. These Reconfigurable Optical Add-Drop Multiplexers (ROADMs) automate the routing of long-distance data waves between metro regions, eliminating the need for manual adjustments.
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is a strong investment option from a dividend point of view. The company maintains a solid financial position, with its trailing twelve-month levered free cash flow exceeding $101 million. During the latest quarter, it reported an operating cash flow of $52.4 million, marking a significant increase compared to $22.2 million in the same period last year.
Alphyn Capital Management, in its Q3 2024 investor letter, also highlighted the company’s strong performance in its core operations. Here is what the firm has to say:
“In its latest earnings release, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) reported steady, albeit unspectacular, performance in its core operations. There has been some progress on extracting cost synergies from the Sprint acquisition, and there is some potential for value creation through monetizing “hidden assets” from its IPv4 and data center co-location fees. The company has made progress in realizing cost synergies from the spring acquisition and may unlock additional value by monetizing “hidden assets” such as its IPv4 holdings and data center co-location fees. However, the crux of the investment thesis remains the potential for significant revenue growth from waves. Without this catalyst, I believe the stock could drop to the low $60s, but with waves revenues materializing, the upside potential could exceed $150.
It is interesting to see what happened with Lumen, a competitor to Cogent, after announcing a $5 billion deal to build a custom network for Microsoft’s data centers on July 24th. The stock jumped from around $1.50 to approximately $7 per share. From my understanding and based on reading a short seller report,2 Lumen is primarily acting as a contractor in this deal, and it is estimated to retain only $800 million in one-time profits from construction and only $21 million in recurring profits.
In contrast, Cogent has the potential to generate over $500 million in recurring operating profits3 if it can successfully sell its wave revenues over the next few years. The capital expenditure is much more limited, as Cogent is connecting an existing infrastructure that all its customers can use instead of a bespoke construction for just one customer. While I don’t expect the same dramatic market reaction as Lumen’s, Lumen’s stock rally was partly due to relief from its potential bankruptcy risk as the influx of cash will help manage its substantial $18 billion debt; I do think this situation reflects the market’s appetite for companies providing infrastructure critical to AI and cloud development.”
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) currently offers a quarterly dividend of C$0.995 per share, having raised it by 1% in November 2024. This was the company’s 49th consecutive quarter of dividend growth, which makes CCOI one of the best dividend stocks on our list. As of January 24, the stock has a dividend yield of 5.26%.
The number of hedge funds tracked by Insider Monkey owning stakes in Cogent Communications Holdings, Inc. (NASDAQ:CCOI) grew to 27 in Q3 2024, from 22 in the previous quarter. These stakes are worth over $540.8 million. With over 1.2 million shares, MIG Capital was the company’s leading stakeholder in Q3.
5. Hasbro, Inc. (NASDAQ:HAS)
Number of Hedge Fund Holders: 30
Dividend Yield as of January 24: 4.88%
Share Price as of January 24: $57.42
Hasbro, Inc. (NASDAQ:HAS) is an American multinational toy manufacturing and entertainment holding company. Its product lineup includes well-known brands like Monopoly, Magic: The Gathering, and Nerf. The company is dedicated to innovation, particularly by blending storytelling with consumer play, which is evident in its diverse approach to digital gaming and entertainment.
Recently, Hasbro, Inc. (NASDAQ:HAS) has been focused on its Blueprint 2.0 initiative, aiming to drive growth through strategic priorities such as brand expansion, enhancing digital offerings, and improving operations. Key strategies include growing direct-to-consumer channels, strengthening its digital presence with platforms like D&D Beyond, and capitalizing on prominent licensing partnerships.
In the third quarter of 2024, Hasbro, Inc. (NASDAQ:HAS)’s performance varied across its segments, with total revenue dropping 15% year-over-year due to challenges in various areas. The Consumer Products segment experienced a 10% decline, primarily driven by fewer closeouts and weaker sales volumes. However, improvements in supply chain operations helped boost the segment’s adjusted operating margin by 3.9 percentage points.
In addition, the company’s cash position YTD also provided some relief to investors. In the first nine months of 2024, the company generated an operating cash flow of $588 million, up from $335 million in the prior-year period. During the third quarter, it also returned $98 million to shareholders through dividends and currently pays a quarterly dividend of $0.70 per share. With a dividend yield of 4.88%, as of January 24, HAS is one of the best dividend stocks on our list.
As per Insider Monkey’s database of Q3 2024, 30 hedge funds owned stakes in Hasbro, Inc. (NASDAQ:HAS), up from 27 in the previous quarter. The consolidated value of these stakes is more than $773.4 million. Among these hedge funds, Citadel Investment Group was the company’s leading stakeholder in Q3.
4. Dow Inc. (NYSE:DOW)
Number of Hedge Fund Holders: 31
Dividend Yield as of January 24: 6.77%
Share Price as of January 24: $41.37
Dow Inc. (NYSE:DOW) is an American chemicals company that mainly operates in the material science industry and is involved in the manufacturing and marketing of a wide range of chemical, plastic, and agricultural products. The company operates in three primary segments: packaging and specialty plastics, industrial intermediates and infrastructure, and performance materials and coatings. Like other companies in commodity-driven sectors, such as oil and gas or gold mining, Dow has no control over commodity prices. Instead, it concentrates on managing costs to produce products as efficiently as possible. In the past 12 months, the stock has declined by over 22%.
Dow Inc. (NYSE:DOW) is currently facing challenges from a global economic slowdown, which is impacting commodity and specialty chemical companies, petrochemical firms, and refiners. Many major refining companies have seen their previous gains diminish, and other chemical companies have also experienced declines in their stock values. Due to these difficulties, the company’s quarterly earnings failed to meet investors’ expectations. The company generated an operating cash flow of $800 million, down $858 million from the same period last year. The decline was primarily attributed to the increased inventory levels required to support sales growth and disruptions in the supply chain due to labor issues. Moreover, the company’s free cash flow fell to $64 million, down from $1.06 billion in the same quarter the previous year.
Despite these setbacks, Dow Inc. (NYSE:DOW) is a reliable dividend payer. In the most recent quarter, the company distributed $490 million to shareholders through dividends. In addition, it has been making regular dividend payments to shareholders since 1912. It currently offers a quarterly dividend of $0.70 per share and has a dividend yield of 6.77%, as of January 24.
According to Insider Monkey’s database of Q3 2024, 31 hedge funds owned stakes in Dow Inc. (NYSE:DOW), compared with 32 in the previous quarter. The overall value of these stakes is more than $1.2 billion.
3. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 32
Dividend Yield as of January 24: 7.84%
Share Price as of January 24: $52.05
Altria Group, Inc. (NYSE:MO) is a Virginia-based tobacco company that manufactures a wide range of related products including cigarettes and other nicotine products. The tobacco industry has undergone considerable transformation in recent years. Although smoking rates worldwide have decreased, many consumers are increasingly turning to smoke-free alternatives like e-cigarettes and oral tobacco, which are viewed as less harmful and have grown in popularity. Altria, recognized for brands such as Marlboro and Parliament, appears to be effectively adjusting to these changing trends by expanding its offerings in smoke-free products.
Altria Group, Inc. (NYSE:MO) is garnering investors’ attention as the stock has outperformed the market in the past 12 months, gaining over 30%. The company is a solid dividend payer and has remained committed to its shareholder obligation. In its most recent quarter, it paid $1.7 billion to investors through dividends. Moreover, it has raised its payouts for 55 years straight. The company pays a quarterly dividend of $1.02 per share and has a dividend yield of 7.84%, as of January 24.
Ashva Capital made the following comment about MO in its Q3 2024 investor letter:
“At Ashva Capital, our focus on intrinsic value–rather than market sentiment or temporary price metrics– sets our portfolio apart from peers. For example, we hold Altria Group, Inc. (NYSE:MO), which has demonstrated resilience and strong performance within our portfolio, particularly following a robust Q3 earnings report. Altria’s results highlighted increased demand for smokeless products, underscoring both the adaptability of its business model and its long-term growth potential—a key factor in our investment decision.
This approach to intrinsic value echoes insights from renowned value investor Bill Miller, whose strategy emphasized fundamental value over market-driven factors. Key principles from Miller’s approach that inform our strategy include:..” (Click here to read the full text)
At the end of Q3 2024, 32 hedge funds tracked by Insider Monkey held stakes in Altria Group, Inc. (NYSE:MO), compared with 36 in the preceding quarter. These stakes have a total value of $2.27 billion. With over 22 million shares, Arrowstreet Capital was the company’s leading stakeholder in Q3.
2. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 57
Dividend Yield as of January 24: 6.85%
Share Price as of January 24: $39.54
Verizon Communications Inc. (NYSE:VZ) is an American multinational telecommunications company. It recently announced its Q4 2024 earnings and posted revenue of $35.7 billion, which showed a 1.6% growth from the same period last year. Revenue growth was driven by strong customer additions in both mobile wireless and internet services. In the mobile wireless segment, the company gained 568,000 net postpaid phone subscribers during the quarter, a notable increase from the 449,000 net additions recorded in the same period last year. Revenue for this segment grew 3.1% year-over-year, reaching $20 billion, marking the 18th consecutive quarter of growth.
Verizon Communications Inc. (NYSE:VZ)’s cash generation also came in strong in FY24. The company reported an operating cash flow of $37 billion and its free cash flow came in at $19.8 billion. The free cash flow showed growth from $18.7 billion in the prior-year period. Analysts are providing an optimistic outlook for the company as it has partnered with NVIDIA to develop an AI-driven enterprise solution that enables various AI applications to operate efficiently on its secure 5G private networks with private Mobile Edge Computing. The company is also exploring other AI-based initiatives, including network slicing and satellite connectivity, to create new revenue opportunities and enhance its competitive position.
In December 2024, Verizon Communications Inc. (NYSE:VZ) declared a quarterly dividend of $0.6775 per share, which was in line with its previous dividend. Overall, the company has been raising its payouts for 18 consecutive years, which makes VZ one of the best dividend stocks on our list. The stock supports a dividend yield of 6.85%, as of January 24.
Third Point Management made the following comment about VZ in its Q3 2024 investor letter:
“While some economic activity has been showing signs of slowing, the defensive composition of the current high yield market with a high mix of higher quality credit and short duration has let the rates tailwind overwhelm such concerns. The lowest quality sectors of the market have performed best, fueled by both soft/no landing expectations, as well as two positive events in the beleaguered telecom space. Telecom/cable have been poor performers year to date due to overhang from the growth of FWA (aka “wireless cable”) and increased fiber building, however the sector re-rated materially on two deals. Second, Verizon Communications Inc. (NYSE:VZ) announced a deal to acquire Frontier Communications (FYBR), a transaction which the fund benefited from by virtue of its investment in FYBR debt. This transaction, aimed at increasing’s VZ fiber footprint, has led to broad revaluation of fiber retail networks that we think is appropriate. While we continue to expect to see FWA rapidly erode non-upgraded cable and especially copper’s share of the low-end broadband market, the VZ deal underscores the value of the higher end footprint.”
According to Insider Monkey’s database of Q3 2024, 57 hedge funds owned investments in Verizon Communications Inc. (NYSE:VZ), worth over $3.2 billion in total. Rajiv Jain’s GQG Partners was the company’s leading stakeholder in Q3.
1. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 59
Dividend Yield as of January 24: 4.89%
Share Price as of January 24: $22.7
AT&T Inc. (NYSE:T) is a Texas-based telecommunications, media, and technology services company that provides a wide range of services to its consumers. The company has consistently expanded its wireless and fiber internet customer base in recent years. Between September 2022 and September 2024, it added approximately 7.5 million wireless customers. In addition, the company gained over two million fiber subscribers, which helped counterbalance the decline in traditional wireline service demand.
Over the past 12 months, AT&T Inc. (NYSE:T) has surged by over 36%, fueled by stronger fundamentals such as improved gross margins and reduced debt. In Q3 2024, the company also announced the sale of its remaining 70% stake in DirecTV to private equity firm TPG, which will generate significant cash flow to further pay down debt and enhance shareholder value. With a solid balance sheet, a rising stock price, and a compelling dividend yield, AT&T is becoming an increasingly attractive option for income-focused investors.
TCW Funds stated the following about AT&T Inc. (NYSE:T) in its Q3 2024 investor letter:
“AT&T Inc. (NYSE:T), based in Dallas, TX, is a nationwide provider of voice, video, and data communications services to businesses and consumers in the wired, wireless, and broadband. At initiation, the stock had a $141 billion market capitalization and met all five valuation factors with an above market dividend yield of 5.6%. From a sustainability prism, the company completed its commitment to invest $2 billion by the end of 2023 to help bridge the digital divide. AT&T is working on enabling low-income households to access to low-cost broadband services through its Access service plan as well as reaching out to more rural communities and Tribal lands where internet access remains a challenge. It is nearly 85% the way to providing one million people in need with digital resources through AT&T Connected Learning® with the goal to be reached by the end of 2025. In 2020, the company announced that it is committed to be carbon neutral by 2035 with zero carbon emission across all operations. It is deploying Smart Climate Solutions – through efforts like its Connected Climate Initiative – that will help enable its business customers to reduce their emissions as well. The company’s goal is to help collectively reduce its emissions by one billion metric tons – a gigaton – by 2035, compared to 2018 levels. The primary catalysts are new/strong management and restructuring. John Stankey was appointed CEO in July 2020 and he is committed to refocusing the company and improving its financial performance. The company combined its WarnerMedia operation with Discovery during 1Q:22 which eliminated AT&T’s exposure to the rapidly evolving media industry and refocused its core telecommunication business thus eliminating a major drag on profitability and the company’s balance sheet by reducing long-term debt from a peak $176 billion during 2020 to $142 billion at the end of June 2024 quarter. AT&T is moving aggressively to reduce cost and sell non-core assets such as its advertising platform Xander to Microsoft† which was accomplished during 2022. The company has redesigned its network to be software driven structure reducing the capital investment cycle in its national network – resulting in a network that is flexible with unrivaled speed and reliability – thus enhancing its nationwide position. By the end of 2023, it expanded its 5G network to reach more than 302 million people in nearly 24,500 cities and towns in the U.S. The company’s mid-band 5G+ network alone grew to cover more than 210 million people. AT&T is one of the largest investors in digital infrastructure in the U.S. Over the five years ending 2023, the company invested nearly $150 billion primarily in its wireless, fiber optics, and wireline networks. The extensive restructuring and refocusing of AT&T on its core business should result in improved earnings and cash flow while at the same time reducing uncertainty for shareholders.”
AT&T Inc. (NYSE:T) is focused on delivering value to shareholders, with plans to allocate more than $40 billion through dividends and share repurchases over the next three years. In the latest quarter, the company maintained strong cash flow, reporting an operating cash flow of $10.2 billion and a free cash flow of $5.1 billion. Its quarterly dividend comes in at $0.2775 per share for a dividend yield of 4.89%, as of January 24.
With a collective stake value of more than $5.6 billion, 59 hedge funds tracked by Insider Monkey held positions in AT&T Inc. (NYSE:T) at the end of Q3 2024. Arrowstreet Capital was the company’s leading stakeholder in Q3.
Overall AT&T Inc. (NYSE:T) ranks first on our list of the best high-dividend stocks under $100. While we acknowledge the potential for T as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than T but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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