12 Most Reliable Dividend Stocks To Buy According to Hedge Funds

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1. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 128

Broadcom Inc. (NASDAQ:AVGO) is an American multinational semiconductor company that offers a wide range of semiconductor and infrastructure software products. The company is behind a wide range of products used in everything from data centers to smartphones. A notable statistic highlighting its dominance in the networking space is that over 99% of all internet traffic passes through Broadcom technology. The company is also benefiting from its acquisition of cloud virtualization company VMware, which was finalized a year ago. VMware’s operating margin has reached 70%, and Broadcom is on track to achieve an adjusted EBITDA exceeding its target of $8.5 billion within three years.

Broadcom Inc. (NASDAQ:AVGO) recently announced its Q4 2024 earnings, reporting revenue of $14.05 billion, which represents a substantial growth of over 51% compared to the same period last year. Semiconductor revenue hit a record $30.1 billion, driven by $12.2 billion in AI revenue. The AI revenue, which grew 220% year-over-year, was primarily fueled by the company’s advanced AI XPUs and Ethernet networking portfolio. For fiscal year 2024, adjusted EBITDA increased by 37% from the previous year, reaching a record $31.9 billion.

Broadcom Inc. (NASDAQ:AVGO), one of the best dividend stocks, currently offers a quarterly dividend of $0.59 per share, having raised it by 11.3% in December 2024. This was the company’s 14th consecutive year of dividend growth. The company achieved this dividend growth because of its strong cash position. During the quarter, the company generated over $5.6 billion in operating cash flow, with free cash flow totaling $5.48 billion. This cash flow accounted for 39% of the company’s revenue. The stock supports a dividend yield of 1.05%, as of January 12.

As of the end of Q3 2024, 128 hedge funds in Insider Monkey’s database held stakes in Broadcom Inc. (NASDAQ:AVGO), compared with 130 in the previous quarter. The consolidated value of these stakes is over $14.5 billion.

Overall, Broadcom Inc. (NASDAQ:AVGO) ranks first on our list of the best dividend stocks. While we acknowledge the potential for AVGO to grow, 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 AVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. 

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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