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15 Best High-Yield Dividend Stocks To Buy Now

In this article, we will discuss 15 best high-yield dividend stocks to buy now. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 5 Best High-Yield Dividend Stocks To Buy Now

Just when the stock market set out for recovery after recording its worst year in 2022, recent developments pulled the market into a new crisis. The failure of Silicon Valley Bank (SVB) is the latest disaster investors are confronted with and has sent ripples through the entire stock market. On Friday, March 10, the S&P 500 fell by 1.4%, closing one of the worst weeks of 2023 for the market. These fluctuating market conditions have turned investors’ attention toward income-generating stocks that usually help them stay afloat in this environment.

Dividend stocks have the ability to generate stable and regular income for investors on a quarterly or monthly basis. However, the high levels of inflation and continuous changes in monetary policies have put a strain on corporate balance sheets with the possibility of dividend cuts. For this reason, analysts are recommending focusing on companies with strong cash flows when investing in dividend stocks. R. Burns McKinney, managing director and senior portfolio manager at NFJ Investment Group, spoke to Wall Street Journal about dividend investing in March. Here are some comments from the analyst:

“The best dividend companies are the ones that have thought it through and have a philosophy behind what they are doing with their dividend. This should be rooted in current cash flow and their expectations for business growth over time.”

Companies with strong cash flow tend to raise their dividends for the long term. These companies continue raising their payouts despite the pressure on corporate balance sheets due to inflation and other economic conditions. To diversify their portfolios across a broad range of sectors, investors also turn to dividend-focused exchange-traded funds. These funds reported strong performance last year considering the market downturn. Dividend funds declined by 6.68% on average in 2022, compared with a 19.4% drop in the S&P 500.

Yields are also significant when investing in dividend stocks as healthy yields can provide investors profits on their investments. Moreover, high-dividend stocks have historically performed better than their peers. Previously we reported that high-yield dividend stocks exhibited less volatility over the last 15 years.

Some of the popular dividend stocks that have grabbed investors’ attention include The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG) as these companies have raised their payouts for a significant period. In addition to this, these companies have strong balance sheets and steady cash flows.

Photo by Karolina Grabowska from Pexels

Our Methodology:

For this list, we selected dividend stocks that have regularly paid dividends to shareholders and have yields above 6%, as of March 18. After that, we sorted these dividend stocks using Insider Monkey’s proprietary hedge fund sentiment data as of Q4 2022, which means that these stocks are popular dividend stocks among elite hedge funds. The list is ranked in ascending order of the number of hedge funds having stakes in the companies.

15. Capital Southwest Corporation (NASDAQ:CSWC)

Number of Hedge Fund Holders: 8

Dividend Yield as of March 18: 12.47%

Capital Southwest Corporation (NASDAQ:CSWC) is a Texas-based internally-managed business development company that provides capital to middle-market companies in the US. On January 30, the company declared a quarterly dividend of $0.53 per share, raising it by 1.9% from the previous dividend. It also announced a supplemental dividend of $0.05 per share. The stock’s dividend yield on March 18 came in at 12.47%.

CSWC can be a great investment option for diverse portfolios alongside some popular dividend stocks like The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG).

In February, B. Riley raised its price target on Capital Southwest Corporation (NASDAQ:CSWC) to $21.50 and maintained a Buy rating on the shares, following the company’s recent quarterly earnings. The firm also appreciated the company’s growing dividends.

At the end of Q4 2022, 8 hedge funds tracked by Insider Monkey owned stakes in Capital Southwest Corporation (NASDAQ:CSWC), compared with 9 a quarter earlier. These stakes have a collective value of over $33.4 million. Among these hedge funds, Two Sigma Advisors was the company’s leading stakeholder.

14. Magellan Midstream Partners, L.P. (NYSE:MMP)

Number of Hedge Fund Holders: 10

Dividend Yield as of March 18: 7.97%

Magellan Midstream Partners, L.P. (NYSE:MMP) is an American pipeline transportation company, based in Oklahoma. In the fourth quarter of 2022, the company reported revenue of $861 million, which showed a 6.4% growth from the same period last year. Its distributable cash flow for the quarter came in at $345 million, up from $297 million from the prior-year period.

Magellan Midstream Partners, L.P. (NYSE:MMP), one of the best high-yield dividend stocks, currently pays a quarterly dividend of $1.0475 per share. The company maintains a 22-year streak of consistent dividend growth. The stock has a dividend yield of 7.97%, as of March 18.

Barclays expects Magellan Midstream Partners, L.P. (NYSE:MMP) to earn higher refined product tariffs on longer routes. In view of this, the firm upgraded the stock to Overweight in January with a $59 price target.

At the end of December 2022, 10 hedge funds tracked by Insider Monkey owned stakes in Magellan Midstream Partners, L.P. (NYSE:MMP), the same as in the previous quarter. These stakes have a total value of over $24.2 million.

13. Oaktree Specialty Lending Corporation (NASDAQ:OCSL)

Number of Hedge Fund Holders: 12

Dividend Yield as of March 18: 12.32%

Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is an American specialty finance company, based in California. The company remained popular among hedge funds in Q4 2022, as 12 funds in Insider Monkey’s database owned stakes in the company, up from 9 in the previous quarter. These stakes have a collective value of nearly $71 million.

In fiscal Q1 2023, Oaktree Specialty Lending Corporation (NASDAQ:OCSL) reported a total investment income of roughly $80 million, which was up by 22% from the same period last year. At the end of December 2022, the company had over $17.4 million available in cash and cash equivalents.

Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is one of the best high-yield dividend stocks on our list as it has raised its payout for consecutive 11 quarters. It currently pays a quarterly dividend of $0.55 per share and has a dividend yield of 12.32%, as of March 18.

12. Universal Corporation (NYSE:UVV)

Number of Hedge Fund Holders: 16

Dividend Yield as of March 18: 6.25%

Universal Corporation (NYSE:UVV) is a Virginia-based tobacco company that specializes in leaf tobacco and other related products. The company is one of the best high-yield dividend stocks on our list as it has raised its payouts for 52 years consistently. It currently offers a quarterly dividend of $0.79 per share and has a dividend yield of 6.25%, as of March 18.

In fiscal Q3 2023, Universal Corporation (NYSE:UVV) reported revenue of $795 million, which showed a 21.8% growth from the same period last year. At the end of December 2022, the company had over $71.2 million in cash and cash equivalents and its total current assets amounted to nearly $2 billion.

At the end of Q4 2022, 16 hedge funds in Insider Monkey’s database owned stakes in Universal Corporation (NYSE:UVV), up from 13 in the previous quarter. The collective value of these stakes is over $73.7 million. Richard S. Pzena and Ken Griffin were some of the company’s major stakeholders in Q4 2022.

11. British American Tobacco p.l.c. (NYSE:BTI)

Number of Hedge Fund Holders: 19

Dividend Yield as of March 18: 9.34%

British American Tobacco p.l.c. (NYSE:BTI) is a London-based multinational manufacturing company that specializes in cigarettes, tobacco, and other related products. Appreciating the company’s overall performance, JPMorgan maintained an Overweight rating on the stock with a 3,600 GBP price target. The company is among the best high-yield dividend stocks on our list.

British American Tobacco p.l.c. (NYSE:BTI) has raised its dividends consistently for the past 23 years. It currently pays a quarterly dividend of $0.735 per share and has a dividend yield of 9.34%, as of March 18.

The number of hedge funds tracked by Insider Monkey owning stakes in British American Tobacco p.l.c. (NYSE:BTI) grew to 19 in Q4 2022, from 14 in the previous quarter. These stakes have a total value of over $2.1 billion.

Distillate Capital Partners LLC mentioned British American Tobacco p.l.c. (NYSE:BTI) in its Q1 2022 investor letter. Here is what the firm has to say:

“Distillate Capital’s International FSV Strategy is less expensive, more fundamentally stable, and less levered than the benchmark All Country World Ex U.S. (ACWI-EX US) Index.The largest new position is British American Tobacco (NYSE:BTI), which was not owned previously due to leverage, but now passes that threshold and offers an 11% free cash flow to market cap yield.”

10. Telephone and Data Systems, Inc. (NYSE:TDS)

Number of Hedge Fund Holders: 20

Dividend Yield as of March 18: 7.44%

Telephone and Data Systems, Inc. (NYSE:TDS) is a Chicago-based multinational telecommunications company. On February 16, the company announced a 3% hike in its quarterly dividend to $0.185 per share. This marked the company’s 48th consecutive year of dividend growth, which places it as one of the best high-yield dividend stocks on our list. As of March 18, the stock has a dividend yield of 7.44%.

At the end of Q4 20222, 20 hedge funds tracked by Insider Monkey reported having stakes in Telephone and Data Systems, Inc. (NYSE:TDS), up from 13 in the previous quarter. These stakes have a consolidated value of over $67.8 million. With over 1.6 million shares, GAMCO Investors was the company’s leading stakeholder in Q4.

9. Enbridge Inc. (NYSE:ENB)

Number of Hedge Fund Holders: 21

Dividend Yield as of March 18: 7.28%

Enbridge Inc. (NYSE:ENB) is a Canadian multinational pipeline and energy company. National Bank lifted its price target on the stock in January to C$56 and maintained a Sector Perform rating on the shares, following the company’s recent quarterly earnings.

Enbridge Inc. (NYSE:ENB), one of the best high-yield dividend stocks on our list, has been making regular dividend payments to shareholders for the past 67 years. It currently offers a quarterly dividend of $0.8875 per share and has a dividend yield of 7.28%, as of March 18.

At the end of Q4 2022, 21 hedge funds tracked by Insider Monkey reported having stakes in Enbridge Inc. (NYSE:ENB), compared with 24 in the previous quarter. These stakes have a total value of over $2.6 billion. GQG Partners was the company’s leading stakeholder in Q4.

8. Omega Healthcare Investors, Inc. (NYSE:OHI)

Number of Hedge Fund Holders: 21

Dividend Yield as of March 18: 9.91%

Omega Healthcare Investors, Inc. (NYSE:OHI) is an American real estate investment trust company that provides financing and capital to the healthcare industry. In the fourth quarter of 2022, the company’s funds available for distribution came in at $171 million. At the end of December, it had over $297 million available for cash and cash equivalents.

In January, Baird maintained a Neutral rating on Omega Healthcare Investors, Inc. (NYSE:OHI) with a $29 price target, expressing concerns regarding the current market situation.

On January 26, Omega Healthcare Investors, Inc. (NYSE:OHI) declared a quarterly dividend of $0.67 per share, which fell in line with its previous dividend. The company has been making regular dividend payments to shareholders for a long time now. The stock’s dividend yield on March 18 came in at 9.91%.

At the end of Q4 2022, 21 hedge funds in Insider Monkey’s database reported owning stakes in Omega Healthcare Investors, Inc. (NYSE:OHI), the same as in the previous quarter. The collective value of these stakes is nearly $78 million. Among these hedge funds, Marshall Wace LLP was the company’s leading stakeholder in Q4.

7. ONEOK, Inc. (NYSE:OKE)

Number of Hedge Fund Holders: 25

Dividend Yield as of March 18: 6.42%

ONEOK, Inc. (NYSE:OKE) is an Oklahoma-based natural gas company. Mizuho raised its price target on the stock in March to $70 with a Neutral rating on the shares, following the company’s recent quarterly earnings.

On January 18, ONEOK, Inc. (NYSE:OKE) announced a 2.1% hike in its quarterly dividend to $0.955 per share. It is one of the best high-yield dividend stocks on our list as it has been paying regular dividends to shareholders for the past 25 years. The stock’s dividend yield came in at 6.42% on March 18.

As of the close of Q4 2022, 25 hedge funds tracked by Insider Monkey reported owning stakes in ONEOK, Inc. (NYSE:OKE), compared with 29 in the previous quarter. The collective value of these stakes is over $273.8 million.

6. Prudential Financial, Inc. (NYSE:PRU)

Number of Hedge Fund Holders: 29

Dividend Yield as of March 18: 6.41%

An American insurance company, Prudential Financial, Inc. (NYSE:PRU) is next on our list of the best high-yield dividend stocks on our list. It can be added to dividend portfolios alongside The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG) as it has raised its dividends for 15 years straight. It pays a quarterly dividend of $1.25 per share and has a dividend yield of 6.41%, as of March 18.

As per Insider Monkey’s Q4 2022 database, 29 hedge funds owned stakes in Prudential Financial, Inc. (NYSE:PRU), up from 21 a quarter earlier. The collective value of these stakes is over $136 million. Citadel Investment Group was the company’s largest stakeholder in Q4.

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Disclosure. None. 15 Best High-Yield Dividend Stocks To Buy Now is originally published on Insider Monkey.

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