In this article, we are going to discuss the 14 best blue chip dividend stocks to buy according to hedge funds.
Dividend stocks have remained a popular choice for income investors for years. They offer a steady income stream and have also delivered solid long-term returns. That is why many analysts and investors continue to favor them, especially when markets become uncertain.
Michael Barclay, lead manager of Columbia Dividend Income, shared a similar view during The Morningstar Investment Conference. He said that “Cycles come and go, and dividends have been an important part of total return in the S&P 500 for almost 100 years.” He added that investors looking for stock market exposure with lower risk can often find it through “a prudently run dividend strategy.”
At the same time, Barclay made it clear that dividend-paying companies are not immune to financial pressure. Even well-known businesses can end up reducing or suspending their payouts. He noted that “the market sniffs out a dividend cut or elimination the year before,” suggesting that investors often see the warning signs well in advance. Interestingly, he said companies tend to perform better over the next 12 months after the dividend cut finally happens. In his view, dividend decisions tell investors a lot about a company’s financial health. Even when dividend growth starts slowing, it can be an early signal that deserves a closer look and a deeper review of the business.
Barclay also explained what he looks for when evaluating dividend stocks. “We start with the balance sheet. If your balance sheet’s overleveraged, you’re going to run into trouble at some point,” he said. He believes cash flow is just as important because it shows whether a company can comfortably support its dividend. He also pays close attention to the payout ratio relative to cash flow. If that ratio becomes too stretched, the company has less room to raise its dividend and may have to pause increases or even cut the payout if business conditions weaken.
With that said, here are the Best Blue Chip Dividend Stocks to Buy Now.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology
To collect data for this article, we used our screeners to identify blue chip companies that boast a market cap of over $50 billion. We then shortlisted stocks that had an annual dividend yield of over 3%, as of July 5, and ranked them by the number of hedge funds invested in them at the end of Q1 2026, as per the Insider Monkey database. Finally, we limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Best Blue Chip Dividends Stocks According to Hedge Funds.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
14. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 32
Dividend Yield as of July 5: 5.07%
Realty Income Corporation (NYSE:O) focuses on acquiring and managing high-quality, single-unit freestanding commercial properties under long-term, net lease agreements leased to leading global operators. The company manages a portfolio of 15,500 properties in all 50 US states, the UK, and eight other countries in Europe.
On June 30, Stifel slightly raised its price target on Realty Income Corporation (NYSE:O) from $70.50 to $70.75, while reiterating a ‘Buy’ rating on the shares. The target boost implies an upside of almost 11% from the current levels.
Meanwhile, earlier on June 17, Scotiabank instead trimmed its price objective on Realty Income Corporation (NYSE:O) from $72 to $67, but maintained its ‘Outperform’ rating on the shares (read more details here).
Realty Income Corporation (NYSE:O) had a strong start to the year and grew its AFFO per share by 6.6% YoY in the first quarter. As a result, it raised its AFFO per share guidance range to the range of $4.41 and $4.4 for full-year 2026, and also increased its investment volume guidance to $9.5 billion at 100% ownership.
Realty Income Corporation (NYSE:O) raised its monthly dividend by 0.2% to $0.271 per share last month. This marks the 135th dividend increase since the company’s listing on the NYSE in 1994. Realty Income boasts the coveted title of a Dividend Aristocrat and was recently placed among the 10 No-Brainer Dividend Stocks to Buy.
13. Simon Property Group, Inc. (NYSE:SPG)
Number of Hedge Fund Holders: 48
Dividend Yield as of July 5: 3.89%
Simon Property Group, Inc. (NYSE:SPG) is a global leader in the ownership of premier shopping, dining, entertainment, and mixed-use destinations and an S&P 100 company.
On July 1, Wolfe Research downgraded Simon Property Group, Inc. (NYSE:SPG) from ‘Outperform’ to ‘Peer Perform’, without assigning the stock a specific price estimate.
Wolfe Research cited valuation concerns for the downgrade, noting that the “all-time high share price is a challenging entry point”. The analyst firm believes that while Simon’s underlying fundamentals remain solid, the company’s current valuation now fully reflects the strength of its business model.
Meanwhile, earlier on June 25, Barclays analyst Richard Hightower turned slightly more bullish on Simon Property Group, Inc. (NYSE:SPG) and raised the firm’s price target on the stock by $1, while keeping an ‘Equal Weight’ rating on the shares (read more details here).
Following a “very good start to 2026, Simon Property Group, Inc. (NYSE:SPG) recently raised its full-year 2026 real estate FFO guidance to a range of $13.10 to $13.25 per share, up from its previous expectations of $13 to $13.25 per share.
12. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 50
Dividend Yield as of July 5: 4.49%
Ford Motor Company (NYSE:F) develops, delivers, and services Ford trucks, sport utility vehicles, commercial vans, and cars, and Lincoln luxury vehicles in the United States, Canada, the United Kingdom, Mexico, and internationally.
On July 2, Ford Motor Company (NYSE:F) reported a 10.3% drop in its US new vehicle sales in the second quarter, as the company reeled from lower inventory of its F-150 pickup trucks. The Detroit-based automaker achieved sales of 549,200 units during the quarter, down from the 612,095 units it sold a year earlier.
Ford revealed that its pure EV sales fell by 40.7% YoY during Q2, while sales of its F-Series trucks, including the F-150, declined by 11% compared to last year. The company closed the quarter with an estimated 12.3% June retail share.
The automaker has now sold 1 million vehicles year to date through June, down 9.6% from 1.1 million during the first half of 2025.
Notably, Ford Motor Company (NYSE:F) raised its adjusted EBIT guidance for full-year 2026 to $8.5 billion to $10.5 billion in its Q1 earnings call in April. This is up from its previous outlook of $8 billion to $10 billion. Meanwhile, the company is targeting an adjusted free cash flow of $5 billion to $6 billion, and capital expenditures of $9.5 billion to $10.5 billion for the year.
11. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 51
Dividend Yield as of July 5: 3.37%
As the fifth-largest commercial bank in the United States, U.S. Bancorp (NYSE:USB) works across a diversified mix of businesses, including commercial and institutional banking, business banking, payments, wealth management, and consumer banking.
On June 30, Oppenheimer analyst Chris Kotowski slightly cut the firm’s price estimate on U.S. Bancorp (NYSE:USB) from $74 to $73, but maintained an ‘Outperform’ rating on the shares. The trimmed target still represents an upside potential of over 18% from the current share price.
The move comes after Oppenheimer revised its ratings and estimates in the financial institutions and investment banking sector as part of a preview ahead of the Q2 earnings season. The analyst firm raised its estimates to reflect a stronger outlook for trading, but recommended limiting exposure in the large-cap banking group to the “most boring and stable commercial banks one can find”, namely U.S. Bancorp and PNC.
Oppenheimer also recommends redeploying capital from other large-cap banks into alternative asset managers.
In other news, U.S. Bancorp (NYSE:USB) recently revealed its intentions to raise its quarterly dividend by 3.8% to $0.54 per share, subject to approval by its Board of Directors, effective in the third quarter of 2026. The bank is largely dependent on interest income instead of investment banking, so its profitability and revenue tend to be more predictable and consistent. This helps USB to maintain its high dividend yield of 3.37% and places it among the 12 Best NYSE Stocks to Buy for Dividends.
10. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders: 52
Dividend Yield as of July 5: 3.12%
Next on our list of the Best Blue Chip Dividend Stocks is EOG Resources, Inc. (NYSE:EOG). It is one of the largest crude oil and natural gas exploration and production companies in the United States, with proved reserves in the US and Trinidad.
On July 2, Jefferies lifted its price objective on EOG Resources, Inc. (NYSE:EOG) from $170 to $175, while maintaining a ‘Buy’ rating on the shares. The revised target, which indicates an upside of almost 34% from the current price level, comes as part of a preview ahead of the Q2 earnings report.
Jefferies expects the production growth from EOG’s Utica operations to deliver an oil beat. While the company is expected to post solid financial results in the second quarter, the analyst firm believes that investors will focus more attention on exploration updates from the UAE when assessing the earnings release.
EOG Resources, Inc. (NYSE:EOG) will announce its Q2 2026 financial results on August 5. The company is targeting an annual oil production growth of 5% and total production growth of 13% for the full-year 2026.
Artisan Partners, an investment management company, stated the following regarding EOG Resources, Inc. (NYSE:EOG) in its Q1 2026 investor letter:
“Due to the Iran war-driven supply shock to energy markets, our top Q1 contributors were energy holdings EOG Resources, Inc. (NYSE:EOG), Diamondback Energy and SLB. They performed about in line with the sector, but we were overweight the sector, which helped portfolio performance. EOG and Diamondback are US shale-focused exploration and production companies. We have stringent criteria for business quality, which is particularly important in commodity sectors, where companies do not control underlying prices and volatility can be significant. EOG is one of the highest quality operators in the E&P space. It has a low-cost production position and a strong reserve base, giving it an advantage over peers. In addition, EOG’s management has long focused on return on invested capital and cash flow generation, distinguishing it from many competitors that prioritize growth over profitability.”
9. Truist Financial Corporation (NYSE:TFC)
Number of Hedge Fund Holders: 54
Dividend Yield as of July 5: 4.08%
Truist Financial Corporation (NYSE:TFC) is a financial services company that provides banking and trust services in the Southeastern and Mid-Atlantic United States.
On June 30, Citi analyst Benjamin Gerlinger downgraded Truist Financial Corporation (NYSE:TFC) from ‘Buy’ to ‘Neutral’, while also cutting the firm’s price estimate on the stock from $63 to $54. The lowered target, which still represents an upside of 6% from the current levels, comes ahead of the company’s upcoming Q2 earnings report on July 17.
Mr. Michael P. Lyons is set to take charge as the next president and chief executive officer of Truist on September 1, and Citi cited the uncertainty around the company’s leadership change as a reason for the downgrade. The analyst firm does not expect the bank to see any positive earnings revisions or multiple re-ratings until investors gain further clarity on its long-term outlook.
In its Q1 earnings call in April, Truist raised the guidance for its net interest income growth to 2% to 3% for full-year 2026, compared to its prior expectation of 3% to 4% growth. Additionally, it is forecasting its full-year GAAP noninterest expense to increase by around 1.75% for the year, versus its previous expectation of 1.25% to 2.25% growth.
8. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 55
Dividend Yield as of July 5: 3.28%
Mondelēz International, Inc. (NASDAQ: MDLZ) is an American multinational confectionery, food, and beverage company that employs approximately 80,000 people around the world.
On June 26, Freedom Broker downgraded Mondelēz International, Inc. (NASDAQ: MDLZ) from ‘Buy’ to ‘Hold’, but kept its price objective on the stock unchanged at $71, implying an upside of over 16% from the current levels.
The analyst firm highlighted that while cocoa prices have hit their highest level in five months, MDLZ has shown a relatively muted response. According to Freedom Broker, commodity inflation has historically weighed on the company’s profitability, leading to a more cautious stance on the shares.
Cocoa prices are currently hovering at over $5,000 per ton amid persistent jitters over the upcoming West African cocoa crop. Farmers in Côte d’Ivoire, the largest producer of cocoa in the world, have warned that the recent above-average rainfall across the key producing regions could lead to flooding, higher disease incidence, and lower cocoa bean quality during the final phase of the mid-crop harvest.
Given the recent cocoa volatility and the subdued biscuit category performance in the US, Mondelēz International, Inc. (NASDAQ: MDLZ) has also remained prudent with its guidance for FY 2026.
7. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 55
Dividend Yield as of July 5: 3.29%
Duke Energy Corporation (NYSE:DUK) engages in the distribution of natural gas and energy-related services. The company owns and operates a diverse mix of regulated power plants – including hydro, nuclear, solar, battery storage, etc.
On July 1, Goldman Sachs analysts removed Duke Energy Corporation (NYSE:DUK) from its US Conviction List as part of its monthly update. That said, the analyst firm reiterated its ‘Buy’ rating on the stock.
On the other hand, earlier on June 24, the analyst over at Morgan Stanley turned slightly more positive on Duke Energy Corporation (NYSE:DUK) and bumped up their price recommendation on the stock by $4, while reaffirming an ‘Equal Weight’ rating on the shares (read more details here).
After a better-than-expected first quarter, Duke Energy Corporation (NYSE:DUK) revealed that it remains on track to achieve its FY 2026 EPS guidance range of $6.55 to $6.80. Moreover, the utility reaffirmed its target of 5% to 7% long-term EPS growth rate through 2030.
Duke has signed electric service agreements for 7.6 GW worth of new data center demand since 2024, including 2.7 GW of ESAs only in Q1 of 2026. The company also revealed that it was in advanced discussions for an additional 15.4 GW of data centers.
6. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 71
Dividend Yield as of July 5: 3.72%
NIKE, Inc. (NYSE:NKE) is engaged in the designing, marketing, and distribution of athletic footwear, apparel, equipment, and accessories and services for sports and fitness activities.
NIKE, Inc. (NYSE:NKE) reported better-than-expected results for its Q4 2026 on June 30. The company’s adjusted earnings of $0.20 per share topped estimates by $0.07, while its revenue of almost $11 billion also exceeded consensus by over $122 million, despite a modest drop of 1% YoY. Revenue in Nike’s largest market, North America, surged by 3% during the quarter, helping boost the company’s wholesale sales.
However, the earnings beat wasn’t enough to win over Wall Street, as Nike’s sales in Greater China declined by 17% on a constant-currency basis in Q4, steepening from a 10% fall in the previous quarter. Greater China accounts for about 15% of the sportswear giant’s annual revenue, and sales in the region are expected to remain under pressure as it works with retail partners to clear excess inventory.
Nike’s weak outlook for FY 2027 also hurt investor sentiment. The company expects overall sales to continue declining in the first half of fiscal 2027, underscoring the uneven nature of its recovery and the slow progress of its turnaround efforts.
While we acknowledge the potential of NKE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NKE and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 Best Blue Chip Dividend Stocks to Buy According to Hedge Funds
Disclosure: None. Follow Insider Monkey on Google News.
