25 Best Stocks For Dividends

In this article, we discuss 25 best stocks for dividends.

Income-generating stocks that allow regular and passive income are usually investors’ top choices in inflationary environments. In this regard, the dividend investment strategy is the most popular among investors as it allows them to invest in companies that pay out regular dividends. These equities offer stable income to shareholders with the potential for capital appreciation. Reinvested dividends, especially those that grow year over year, are an important way to generate compounding returns over time.

The contribution of dividend stocks to the overall market’s return dates back to the early 1800s. According to a study conducted by Dr. Robert Arnott, dividends were the main source of returns from 1802 to 2002, significantly outpacing inflation and other asset classes. During this period, US equities delivered an average return of 7.9%, with dividends representing 5% and real dividend growth accounting for 0.8% of the total return. They remained crucial to the overall market returns in the most recent years. Previously, we reported that compounded dividends represented over 70% of global equity returns since 1970.

Analysts also advise investing in dividend stocks because high-interest rates period make the preservation of capital more important for investors. Last year’s returns also show the prominence of dividend stocks over their peers. The S&P 500 High Dividend Index fell by 1.11% including payouts in 2022, compared with an 18% decline in the S&P 500. During the year, the S&P 500 Non-Dividend Payers fell by 21.1%.

Jamie Hopkins, managing partner of wealth solutions at Carson Wealth, spoke to Fortune about income investing in March. Here are some comments from the analyst:

“To achieve that steady stream of income, investors will build a portfolio with securities and assets like bonds, dividend-paying stocks, and real estate. There is no exact formula to income investing, and there are a lot of ways to add income-generating assets to your portfolio.”

Companies like McDonald’s Corporation (NYSE:MCD), Hormel Foods Corporation (NYSE:HRL), and Roper Technologies, Inc. (NYSE:ROP) are popular among investors due to their long dividend growth track records. In addition to this, these companies have strong cash flow generation that promises further dividend growth. To get more information about dividend growers, readers can have a look at 12 Dividend Kings To Buy For Safe Dividend Growth.

In this article, we will discuss the 25 best stocks for dividends.

Our Methodology:

For this list, we scoured through several credible and expert sources, including Forbes, Morningstar, Barron’s, and Business Insider, and identified their consensus picks from their recent articles. We also measured hedge fund sentiment around each stock, according to Insider Monkey’s database for Q4 2022. The stocks are ranked in ascending order of the number of hedge funds having stakes in the companies.

25 Best Stocks For Dividends

25. Federal Realty Investment Trust (NYSE:FRT)

Number of Hedge Fund Holders: 16

Federal Realty Investment Trust (NYSE:FRT) is an American real estate investment trust company that mainly invests in shopping centers. The company reported strong Q4 results and was lauded by Wall Street analysts following its earnings. In February, Credit Suisse maintained an Overweight rating on the stock with a $127 price target.

Federal Realty Investment Trust is one of the best dividend stocks on our list as it holds the longest dividend growth track record in the REIT sector. The company has raised its payouts for 55 years in a row. It currently pays a quarterly dividend of $1.08 per share and has a dividend yield of 4.67%, as of March 25. Other popular dividend stocks include McDonald’s Corporation, Hormel Foods Corporation, and Roper Technologies, Inc..

At the end of Q4 2022, 16 hedge funds tracked by Insider Monkey owned stakes in Federal Realty Investment Trust, worth over $75.7 million collectively.

24. Mid-America Apartment Communities, Inc. (NYSE:MAA)

Number of Hedge Fund Holders: 23

Mid-America Apartment Communities, Inc. (NYSE:MAA) is a publicly traded real estate investment trust that invests in apartments and owns over 300 apartment communities. On March 21, the company declared a quarterly dividend of $1.40 per share, which fell in line with its previous dividend. It is among the best dividend stocks on our list as it has been raising its dividends for 12 years. The stock’s dividend yield on March 25 came in at 3.91%.

Barclays mentioned Mid-America Apartment Communities, Inc. in its March investors’ note, highlighting the strong rent growth outlook for 2023. Given this, the firm raised its price target on the stock to $192 with an Overweight rating on the shares.

At the end of December, 23 hedge funds tracked by Insider Monkey reported having stakes in Mid-America Apartment Communities, Inc., with a total value of over $323 million.

Carillon Tower Advisers mentioned Mid-America Apartment Communities, Inc. in its Q3 2022 investor letter. Here is what the firm has to say:

“Mid-America Apartment Communities, Inc. (NYSE:MAA) Communities is a REIT that owns, develops, acquires, and operates multi-family apartment communities in the Sunbelt region of the U.S. In recent quarters, its results have benefited from significant lease rate increases, but investors have begun to anticipate a deceleration as monetary policy takes aim at inflation.”

23. Illinois Tool Works Inc. (NYSE:ITW)

Number of Hedge Fund Holders: 34

An American manufacturing company, Illinois Tool Works Inc. (NYSE:ITW) is next on our list of the best dividend stocks. The company was a popular stock among elite funds in Q4 2022, as 34 funds in Insider Monkey’s database owned stakes in the company, up from 27 in the previous quarter. The collective value of these stakes is over $1.04 billion.

Illinois Tool Works Inc. currently pays a quarterly dividend of $1.31 per share for a dividend yield of 2.26%, as of March 25. The company maintains a 50-year streak of consistent dividend growth and has raised its dividends at an annual average rate of 10.09% in the past five years.

Appreciating Illinois Tool Works Inc.’s strong revenue growth, operating profits, and margins, UBS raised its price target on the stock to $245 in February with a Neutral rating on the shares.

22. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 43

International Business Machines Corporation (NYSE:IBM) is a New York-based multinational tech company that provides IT services and products to its consumers. On January 31, the company announced a quarterly dividend of $1.35 per share, which was consistent with its previous dividend. It has been rewarding shareholders with 27 years of growing dividends. The stock has a dividend yield of 5.27%, as recorded on March 25.

International Business Machines Corporation remained committed to its shareholder return in FY22. The company returned $5.9 billion to shareholders in dividends throughout the year, which was smoothly covered within its free cash flow of $9.3 billion. Its strong cash flow and consecutive dividend growths make it one of the best dividend stocks on our list.

At the end of Q4 2022, 43 hedge funds tracked by Insider Monkey reported owning stakes in International Business Machines Corporation, up from 40 in the previous quarter. These stakes have a collective value of $1.23 billion. Among these hedge funds, Citadel Investment Group was the company’s leading stakeholder in Q4.

21. Dow Inc. (NYSE:DOW)

Number of Hedge Fund Holders: 45

Dow Inc. (NYSE:DOW) is a Michigan-based chemicals company that provides sustainable packaging and consumer care solutions. The company currently offers a quarterly dividend of $0.70 per share and has a dividend yield of 5.41%, as of March 25. It is one of the best dividend stocks on our list as the company has been making regular dividend payments since 1912.

Deutsche Bank upgraded Dow Inc. to Buy in March with a $60 price target. The firm mentioned that the stock offers an ‘attractive entry point’ at current levels.

According to Insider Monkey’s database, 45 hedge funds owned stakes in Dow Inc. in Q4 2022, up from 43 in the previous quarter. The collective value of these stakes is over $1.1 billion. With over 10.5 million shares, Pzena Investment Management was the company’s leading stakeholder in Q4.

20. Altria Group, Inc. (NYSE:MO)

Number of Hedge Fund Holders: 45

Altria Group, Inc. (NYSE:MO) is an American tobacco company, based in Virginia. The company specializes in the production and manufacturing of cigarettes and related products. In February, Citigroup raised its price target on the stock to $49.50 and maintained a Neutral rating on the shares, appreciating the company’s overall performance.

Altria Group, Inc. returned over $6.6 billion to shareholders in dividends in FY22, which places it as one of the best dividend stocks on our list. Moreover, the company has raised its payouts consistently for the past 53 years. It currently offers a quarterly dividend of $0.94 per share and has a dividend yield of 8.55%, as of March 25.

At the end of Q4 2022, 45 hedge funds tracked by Insider Monkey reported owning stakes in Altria Group, Inc., compared with 47 in the previous quarter. These stakes have a total value of over $1.8 billion.

Broyhill Asset Management mentioned Altria Group, Inc. in its Q4 2022 investor letter. Here is what the firm has to say:

“We rebalanced our tobacco exposure during the year, reducing our investment in Altria Group, Inc. (NYSE:MO) as the future of the company’s combustible cigarette business became increasingly questionable given pending US legislation and a lackluster portfolio of reduced risk products. We reinvested the proceeds in Philip Morris so that relative position sizing is more consistent with our increased conviction.”

19. Philip Morris International Inc. (NYSE:PM)

Number of Hedge Fund Holders: 47

Philip Morris International Inc. (NYSE:PM) is an American multinational tobacco company, based in New York. On March 9, the company declared a quarterly dividend of $1.27 per share, which was consistent with its previous dividend. It has been raising its dividends consistently for the past 14 years. The stock’s dividend came in at 5.60% on March 25.

UBS upgraded Philip Morris International Inc. to Buy in March with a $116 price target, expecting growth in tobacco products in mature markets.

At the end of December 2022, 47 hedge funds tracked by Insider Monkey reported owning stakes in Philip Morris International Inc., with a total value of over $6.2 billion.

Broyhill Asset Management mentioned Philip Morris International Inc. in its Q4 2022 investor letter. Here is what the firm has to say:

“Philip Morris International Inc. (NYSE:PM) advanced 11% for the twelve months ending December 2022. After scratching our heads for years, we have to confess to feeling a little bit of pleasure watching some of the previous nonsense get their just deserts. When we first disclosed our investment in Philip Morris, we highlighted the gap between the “haves” and the “have nots” using the Horizons Marijuana Life Sciences Index, which had gained 140% in a few weeks, as an example. The top five stocks in this index generated $1.6B in sales in FY20 and traded at a combined $37.3B market capitalization or more than 23x sales. In contrast, Reduced Risk Products (RRPs) at Philip Morris (PM) generated over $6.8B in FY20 sales, which was less than 20x PM’s then $135 billion market capitalization. So one could have bought the top five marijuana companies that burned a cumulative $1.2 billion in trailing twelve-month free cash flow for 23x sales or bought Phillip Morris’ RRPs for less than 20x sales and got over $9 billion in free cash flow generated by their traditional business for free! Since then, the Horizons Marijuana Life Sciences Index went on to shed ~ 85% of its value while PM returned ~ 55% over the same period.”

18. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 48

Target Corporation (NYSE:TGT) is an American general merchandise retailer with stores all over the country. Roth MKM raised its price target on the stock to $158 with a Neutral rating on the shares, following the company’s recent Q4 earnings.

Target Corporation, one of the best dividend stocks on our list, has been raising its payouts consistently for the past 51 years. The company offers a quarterly dividend of $1.08 per share for a dividend yield of 2.77%, as of March 25.

The number of hedge funds tracked by Insider Monkey owning stakes in Target Corporation stood at 48 in Q4 2022. The collective value of these stakes is nearly $1.7 billion.

Madison Funds mentioned Target Corporation in its Q4 2022 investor letter. Here is what the firm has to say:

“Despite having already addressed excess inventories, Target Corporation (NYSE:TGT) reported a disappointing third quarter and further cut fourth quarter guidance. Although sales were slightly better than expected, Target saw a slowdown in discretionary sales. Gross margins were below expectations with higher markdowns, increased shrink, and incremental costs. Long-term, we expect Target to be able to return to operating margins in the 6% to 8% range as inventories return to normal levels as well as seeing a normalization in supply chain costs.”

17. Automatic Data Processing, Inc. (NASDAQ:ADP)

Number of Hedge Fund Holders: 49

Automatic Data Processing, Inc. (NASDAQ:ADP) is an American management services company, headquartered in New Jersey. The company was a part of 49 hedge fund portfolios in Q4 2022, up from 48 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of over $3.52 billion.

Barclays maintained an Overweight rating on Automatic Data Processing, Inc. in January with a $278 price target, after the company posted strong quarterly earnings.

Automatic Data Processing, Inc. is one of the best dividend stocks on our list as it has a 48-year run of raising its dividends. The company currently offers a quarterly dividend of $1.25 per share and has a dividend yield of 2.34%, as of March 25.

Carillon Tower Advisers mentioned Automatic Data Processing, Inc. in its Q3 2022 investor letter. Here is what the firm has to say:

“Despite a difficult macroeconomic environment, hiring trends have remained robust and Automatic Data Processing, Inc. (NASDAQ:ADP) shares reacted positively to strong quarterly earnings and guidance that was well above consensus expectations.”

16. 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 52

3M Company (NYSE:MMM) is an American multinational company that offers services in a wide range of industries. On February 7, the company declared a 0.7% hike in its quarterly dividend to $1.50 per share. Through this increase, the company took its dividend growth streak to 65 years. As of March 25, the stock has a dividend yield of 5.93%. It is among the best dividend stocks on our list.

As per Insider Monkey’s Q4 2022 database, 52 hedge funds owned stakes in 3M Company, up from 49 in the previous quarter. These stakes have a collective value of over $1.57 billion. Ken Griffin, Cliff Asness, and Jack Woodruff were some of the company’s leading stakeholders in Q4.

15. Lockheed Martin Corporation (NYSE:LMT)

Number of Hedge Fund Holders: 53

Lockheed Martin Corporation (NYSE:LMT) is a Maryland-based aerospace company that deals in arms, defense, and information security. In February, Credit Suisse double-upgraded the stock to Outperform in February and also lifted its price target on the stock to $510. The firm appreciated that the company has reported three consecutive quarters with a growing book-bill ratio.

Lockheed Martin Corporation, one of the best dividend stocks, currently pays a per-share dividend of $3.00 every quarter. In 2022, the company took its dividend growth streak to 20 years. The stock has a dividend yield of 2.53%, as of March 25.

At the end of Q4 2022, 53 hedge funds tracked by Insider Monkey owned stakes in Lockheed Martin Corporation, the same as in the previous quarter. The collective value of these stakes is over $2.13 billion.

Vltava Fund mentioned Lockheed Martin Corporation in its Q3 2022 investor letter. Here is what the firm has to say:

“LMT is one of the world’s largest aerospace and defence companies. The war in Ukraine has reminded investors and the wider public just how important these companies are. The aerospace and defence industry in the USA is an established oligopoly. This means that a few large firms play a dominant role. While collectively they comprise an oligopoly, individually they often have monopoly positions in particular narrower segments. Their main counterparty is the US government, a key customer in what is known as a monopsonist position. This is a rather unusual situation, but one that is very advantageous for companies such as LMT. (Click here to see the full text)

14. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 55

Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based energy company that specializes in the exploration of hydrocarbons. It offers a quarterly dividend of $0.20 per share and has a dividend yield of 10.87%, as of March 25.

Following the company’s Q4 earnings, Barclays maintained an Equal Weight rating on Devon Energy Corporation in March with a $67 price target.

At the end of December 2022, 55 hedge funds owned stakes in Devon Energy Corporation, up from 51 in the previous quarter, according to Insider Monkey’s data. The stakes are valued at $823.5 million collectively.

GoodHaven Capital Management mentioned Devon Energy Corporation in its Q2 2022 investor letter. Here is what the firm has to say:

“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”

13. Pioneer Natural Resources Company (NYSE:PXD)

Number of Hedge Fund Holders: 55

Pioneer Natural Resources Company (NYSE:PXD) is an American independent oil and natural gas exploration and production company. The company is one of the best dividend stocks on our list as it returned over $8 billion to shareholders in dividends in FY22. It currently pays a quarterly dividend of $5.58 per share and has a dividend yield of 14.17%, as of March 25.

Citigroup upgraded Pioneer Natural Resources Company to Buy in March and also raised its price target on the stock to $210. The firm called the company one of its top picks in the sector.

The number of hedge funds tracked by Insider Monkey owning stakes in Pioneer Natural Resources Company grew to 55 in Q4 2022, from 49 a quarter earlier. These stakes have a consolidated value of roughly $842 million. Among these hedge funds, Citadel Investment Group was the company’s leading stakeholder in Q4.

12. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 56

An American telecommunications company, Verizon Communications Inc. (NYSE:VZ) is next on our list of the best dividend stocks. In March, BofA maintained a Neutral rating on the stock with a $41 price target. The firm mentioned that the company’s core business is ‘solid’ and its dividend is ‘sustainable’.

On March 2, Verizon Communications Inc. declared a quarterly dividend of $0.6525 per share, which fell in line with its previous dividend. The company maintains a 16-year streak of dividend growth, which places it as one of the best dividend stocks on our list. The stock has a dividend yield of 6.93%, as reported on March 25.

At the end of Q4 2022, Verizon Communications Inc. was a part of 56 hedge fund portfolios, as per Insider Monkey’s data. The stakes owned by these funds have a total value of over $1.5 billion.

Mawer Investment Management mentioned Verizon Communications Inc. in its Q3 2022 investor letter. Here is what the firm has to say:

“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) has been impacted as wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”

11. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 58

The Coca-Cola Company (NYSE:KO), an American beverage company, holds one of the longest dividend growth track records of 61 years. The company currently offers a quarterly dividend of $0.46 per share and has a dividend yield of 3.02%, as of March 25. In addition to KO, income investors are also paying attention to McDonald’s Corporation, Hormel Foods Corporation, and Roper Technologies, Inc..

In FY22, The Coca-Cola Company generated over $9.5 billion in free cash flow, which was sufficient to cover its dividend payments worth $7.6 billion. The company’s strong cash position and dividend growth streak make it one of the best dividend stocks on our list.

At the end of Q4 2022, 58 hedge funds in Insider Monkey’s database reported having stakes in The Coca-Cola Company. These stakes have a consolidated value of $28.8 billion.

Rowan Street Capital mentioned The Coca-Cola Company in its Q4 2022 investor letter. Here is what the firm has to say:

“Let’s take The Coca-Cola Company (NYSE:KO) for example. Its dividend yield is 2.8%, earnings are estimated to grow at only 3.6% rate per year over next 4 years, and its earnings multiple is currently at 24x (based on next years forecasted earnings). KO has an anemic growth, so we can argue that paying 24x earnings is not very attractive. Let’s assume that the multiple will stay constant over the next 3-5 years, thus our expected annual returns will be 2.8%+3.6% = 6.4% (that is below the current reported inflation rate and only slightly above the risk-free rate of 4%).”

10. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 60

Amgen Inc. (NASDAQ:AMGN) is a California-based multinational biotech company that specializes in the discovery and manufacturing of biological medicines. On March 7, the company declared a quarterly dividend of $2.13 per share, which was in line with its previous dividend. It has raised its payouts every year since 2011, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 3.58%, as of March 25.

In March, Wells Fargo upgraded Amgen Inc. to Overweight with a $265 price target.

Amgen Inc. was a popular stock among hedge funds in Q4 2022, as 60 funds in Insider Monkey’s database owned stakes in the company, up from 53 in the previous quarter. The collective value of these stakes is over $2.2 billion. With over 1.5 million shares, Two Sigma Advisors was the company’s leading stakeholder.

9. Texas Instruments Incorporated (NASDAQ:TXN)

Number of Hedge Fund Holders: 61

Texas Instruments Incorporated (NASDAQ:TXN) is an American semiconductor manufacturing company, based in Texas. The company remained committed to its shareholders in Q4 2022, returning approximately $2 billion to investors in dividends. It is among the best dividend stocks on our list.

Texas Instruments Incorporated currently offers a quarterly dividend of $1.24 per share for a dividend yield of 2.76%, as of March 25. The company maintains a 19-year streak of consistent dividend growth and has raised its payouts at an annual average rate of 18.1%.

At the end of December 2022, 61 hedge funds in Insider Monkey’s database owned stakes in Texas Instruments Incorporated, up from 59 in the previous quarter. These stakes have a collective value of nearly $2 billion.

8. American Tower Corporation (NYSE:AMT)

Number of Hedge Fund Holders: 61

American Tower Corporation (NYSE:AMT) is a real estate investment trust company that owns and operates wireless and broadcast communications infrastructure globally. Barclays maintained an Overweight rating on the stock in March with a $229 price target, highlighting the customer exposure and growth metrics.

American Tower Corporation pays a quarterly dividend of $1.56 per share. In 2022, the company raised its dividend for the 11th consecutive year, which makes it one of the best dividend stocks on our list. As of March 25, the stock has a dividend yield of 3.13%.

As of the end of Q4 2022, 61 hedge funds tracked by Insider Monkey reported having stakes in American Tower Corporation, worth nearly $3.4 billion collectively.

ClearBridge Investments mentioned American Tower Corporation in its Q4 2022 investor letter. Here is what the firm has to say:

“Real estate and communication services sectors generated positive returns but lagged others within the Russell 1000 Value Index. The Strategy benefited from its underweight in the real estate sector with American Tower Corporation (NYSE:AMT) as its only holding. REITs are generally perceived to be interest rate sensitive, which negatively impacted American Tower’s recent stock performance. However, we remain confident in the company’s highly durable and predictable business model, which is supported by long-term customer contracts and insatiable wireless data growth.”

7. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 62

A Georgia-based home improvement company, The Home Depot, Inc. (NYSE:HD) is next on our list of the best dividend stocks. The company offers a quarterly dividend of $2.09 per share, having raised it by 10% on February 21. This was the company’s 13th consecutive year of dividend growth. The stock’s dividend yield on March 25 came in at 2.95%.

At the end of Q4 2022, 62 hedge funds tracked by Insider Monkey reported owning stakes in The Home Depot, Inc., with a total value of over $4.8 billion.

Matrix Asset Advisors mentioned The Home Depot, Inc. in its Q3 2022 investor letter. Here is what the firm has to say:

“During the quarter, we re-established a position in The Home Depot, Inc. (NYSE:HD) sold earlier this year, after the shares declined sharply on big picture concerns about a softer housing market and lower consumer spending. We believe that HD is a very well-managed company, positioned to continue showing good profits even as the economy decelerates. The products it carries in inventory are in year-round demand from contractors and homeowners wanting to maintain and improve their homes. The company has historically been shareholder friendly, repurchasing shares and increasing the dividend, most recently by 15% earlier this year. On September 30, HD’s current dividend yield was 2.8%.”

6. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 70

PepsiCo, Inc. (NASDAQ:PEP) is a New York-based food company that deals in the manufacturing and marketing of food, snacks, and other beverages. Deutsche Bank raised its price target on the stock to $188 in March with a Hold rating on the shares, expressing concerns about the consumer staples sector.

PepsiCo, Inc., one of the best dividend stocks, has been raising its dividends consistently for the past 50 years. It currently offers a quarterly dividend of $1.15 per share and has a dividend yield of 2.57%, as of March 25.

At the end of December 2022, 70 hedge funds in Insider Monkey’s database owned stakes in PepsiCo, Inc., worth over $4.4 billion collectively. Among these hedge funds, Fundsmith LLP was the company’s largest stakeholder in Q4.

Lindsell Train mentioned PepsiCo, Inc. in its Q3 2022 investor letter. Here is what the firm has to say:

“At this point, it may help to give a further example of these self-reinforcing moats to illustrate the idea, drawing from the consumer franchises side of our portfolio. In our view, strong consumer brands can similarly exhibit Lindycompatible anti-ageing properties. Consider, that the longer a company invests in its brands through advertising and R&D, the stronger and more resonant they may get. When successful, a self-sustaining feedback loop is established, whereby it becomes ever harder to recreate a heritage-rich brand from scratch, raising barriers to entry, and proportionately increasing its likely lifespan. There are plenty of long-lived portfolio franchises I could reference here, but I’ve gone with PepsiCo (NYSE:PEP); partly because we have good time-series stats on it (beware data bias!) but also, as I hope will become evident, because Pepsi over its 129 years has succeeded in creating some wonderfully deep moats.

With Pepsi Cola you get the flagship soft drinks brand, which is both global and generational, but you also get the Frito-Lay salty snacks portfolio assembled alongside it, claiming nearly 40% of the global market. That’s ten-times greater than the nearest competitor and likely higher than the next 65 competitors combined. These are exceptionally strong global bands with market shares to match; the long-term empirical result being Pepsi’s dividend record which over the past 66 years (as far back as we’ve been able to go) has compounded at an annualised rate of 10%. Pepsi is no ‘in at the ground floor’ start-up today, but it wasn’t six decades ago either. Early growth investor Philip Fisher put it well when in 1958 (two years into Pepsi’s current winning streak) he wrote of “companies which in spite of outstanding prospects of major further growth are so financially strong, with roots going so deep into the economic soil, that they qualify under the general classification of ‘institutional stocks’”. PepsiCo fits this description well…” (Click here to see the full text)

5. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 77

Merck & Co., Inc. is a New Jersey-based multinational pharmaceutical company. The company was a part of 77 hedge fund portfolios at the end of Q4 2022, according to Insider Monkey’s database. The stakes owned by these hedge funds have a total value of over $5 billion.

Merck & Co., Inc. has raised its dividends for 12 years in a row. Its current quarterly dividend stands at $0.73 per share and has a dividend yield of 2.79%, as recorded on March 25.

Berenberg sees price appreciation for MRK and raised its price target on the stock to $130 in March. The firm maintained a Buy rating on the shares.

Artisan Partners mentioned Merck & Co., Inc. in its Q4 2022 investor letter. Here is what the firm has to say:

“Merck & Co., Inc. (NYSE:MRK) is a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. Shares have benefited from investors seeking safety in areas with less economic and interest rate sensitivity. With about one third of its sales generated by blockbuster oncology drug Keytruda, the key issue for investors is the success of its large R&D pipeline to replace those sales when Keytruda comes off patent in 2028. However, Merck seems to be getting little credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions, besides return of capital to shareholders via dividends and share repurchases.”

4. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 79

Exxon Mobil Corporation (NYSE:XOM) is one of the world’s largest chemical and energy companies in the world. It is one of the best dividend stocks on our list as it has raised its payouts for 40 years straight. The company currently pays a quarterly dividend of $0.91 per share for a dividend yield of 3.52%, as of March 25.

In March, Mizuho raised its price target on Exxon Mobil Corporation to $147 with a Buy rating on the shares, presenting a solid outlook for energy companies.

At the end of Q4 2022, the number of hedge funds owning stakes in Exxon Mobil Corporation grew to 79, from 75 a quarter earlier, according to Insider Monkey’s Q4 data. These stakes have a consolidated value of over $7.1 billion.

3. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 84

Johnson & Johnson is one of the largest pharmaceutical industry companies in the world. The company also deals in consumer packaged products. The company maintains a 61-year streak of dividend growth and currently pays a quarterly dividend of $1.13 per share. The stock’s dividend yield on March 25 came in at 2.96%.

As per Insider Monkey’s Q4 2022 database, 84 hedge funds owned investments in Johnson & Johnson, with a total value of over $5.5 billion. Ken Griffin, Ray Dalio, and Donald Yacktman were some of the company’s leading stakeholders in Q4.

2. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 87

Wells Fargo & Company is an American multinational financial services company that offers a wide range of banking services to its consumers. The company has been making regular dividend payments to shareholders since 1959, which places it as one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.30 per share and has a dividend yield of 3.31%, as recorded on March 25.

RBC Capital maintained a Sector Perform rating on Wells Fargo & Company in March with a $42 price target.

Wells Fargo & Company was a popular stock among elite funds in Q4 2022, as 87 funds in Insider Monkey’s database owned investments in the company, up from 77 in the previous quarter. These investments have a value of over $5.5 billion collectively.

Davis Advisers mentioned Wells Fargo & Company in its annual 2022 investor letter. Here is what the firm has to say:

“Our investment thesis for our next largest bank investment, Wells Fargo, is totally different. As is well known, Wells Fargo & Company (NYSE:WFC) is the country’s third-largest bank, serving one in three U.S. households. Years of regulatory missteps under prior managements resulted in reputational damage, higher-than-average expenses, numerous consent orders, caps on asset growth, all added to the negative impact of low rates on their interest income. However, where others see bad news, we see resiliency and gradual improvement. Wells Fargo’s resiliency is reflected in the fact that despite years of terrible headlines and congressional hearings, Wells Fargo’s core customers stayed put and customer attrition remains extraordinarily low. (Click here to view the full text)

1. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 100

An American multinational financial services company, JPMorgan Chase & Co. tops our list of the best dividend stocks. The company pays a quarterly dividend of $1.00 per share and has a dividend yield of 3.20%, as of March 25.

At the end of Q4 2022, 100 hedge funds tracked by Insider Monkey reported having stakes in JPMorgan Chase & Co., compared with 110 in the previous quarter. These stakes have a collective value of over $5.1 billion. Citadel Investment Group was the company’s largest stakeholder in Q4.

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This article is originally published at Insider Monkey.