In this article we present the list of 12 Best Annual Dividend Stocks To Buy Now.
Cameco Corporation (NYSE:CCJ), News Corporation (NASDAQ:NWS), and CRH plc (NYSE:CRH) are some of the leading companies that pay dividends on either an annual or semi-annual basis.
Of the thousands of companies on the U.S. stock market that make dividend payments to shareholders, the vast majority do so either monthly or quarterly. In fact, there are so few companies that make dividend payments on an annual basis that we had to include a few companies that make semi-annual payments (which are slightly less rare, though still uncommon) to fill out our list.
More frequent dividend payout schedules can be advantageous for investors, allowing them to reinvest their payments sooner or giving them a steady flow of income. Some of the best dividend stocks on the market make less frequent payments though and shouldn’t be overlooked. If nothing else, stocks that make annual dividend payments are easier to trade in and out of if you’re just looking to stockpile dividend payments.
There are a number of reasons why a company may choose to make dividend payments less frequently. For some companies, the seasonality of their business model may dictate that the majority of their earnings are accrued during a small stretch of the year, which may incentivize them to make dividend payments during only those periods. In other cases, broader cash flow concerns may prompt a company to make less frequent payments so they can better manage short downturns in their income streams.
That’s not to say any of the following stocks aren’t necessarily safe dividend stocks. That all comes down to the company’s overall payout ratio and future cash flow projections, which we’ll dig into when analyzing each of them in turn. That said, several of them are smaller companies with less robust dividend payment histories and limited institutional support, so that’s worth considering before making any investment decision.
The following list of top annual dividend stocks includes all of the companies’ relevant dividend history, including payout rates, payout ratios, the latest changes to their dividend policies, and the schedule for their upcoming payments.
Image by Nattanan Kanchanaprat from Pixabay
Our Methodology
The following annual dividend stocks are ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q2 2022 reporting period.
12 Best Annual Dividend Stocks To Buy Now
12. IF Bancorp Inc (NASDAQ:IROQ)
Number of Hedge Fund Shareholders: 1
Annual Dividend Payout: $0.375
News Corporation (NASDAQ:NWS), Cameco Corporation (NYSE:CCJ), and CRH plc (NYSE:CRH) rank as some of the best annual dividend stocks to buy now. A compelling semi-annual dividend payer is IF Bancorp Inc (NASDAQ:IROQ), which has grown its dividend at a CAGR of 15.8% over the last five years, having more than doubled its annual payouts since 2017.
A bank holding company that manages the business activities of personal and commercial bank Iroquois Federal, IF Bancorp Inc (NASDAQ:IROQ) grew net income to $1.84 per diluted share in the company’s FY22 ended June 30, up from $1.74 a year earlier. Return on average equity jumped 73 basis points during the company’s fiscal Q4 to 7.07%. While it may not be able to sustain its current dividend growth rate longer-term, with a yield already above 2%, IROQ shares are an interesting under-the-radar dividend pick.
Just a lone hedge fund was long IF Bancorp Inc (NASDAQ:IROQ) on June 30, that being Jeffrey Gendell’s Tontine Asset Management, which owned 251,679 shares worth $4.78 million. In over ten years of tracking the stock’s hedge fund ownership, it’s never had less than one or more than two shareholders during any given quarter.
11. Cementos Pacasmayo S.A.A. (NYSE:CPAC)
Number of Hedge Fund Shareholders: 1
Annual Dividend Payout: $0.5276
Peruvian cement company Cementos Pacasmayo S.A.A. (NYSE:CPAC) has made an annual or special dividend payments over each of the last ten years. Its next payment is scheduled for December 12 with an ex-dividend date of November 11. The company’s dividend payout ratio is hovering above 90%, so the dividend is unlikely to go much higher from here, especially with analysts predicting the company’s EPS will fall by 13% to $0.34 next year. With a yield of nearly 10% though, its dividend doesn’t need continued growth to be a compelling micro-cap dividend play.
Cementos Pacasmayo S.A.A. (NYSE:CPAC) grew operating income by 7.6% in the September quarter, reaching just under $90 million. Revenue grew by just over 9% to $554 million, slightly outpacing the company’s cost of revenue, which rose by 8%.
There was also just a lone hedge fund long Cementos Pacasmayo S.A.A. (NYSE:CPAC) on June 30, Jim Simons’ quant fund Renaissance Technologies, which owned a paltry 12,464 shares, which it bought during the second quarter. Prior to that, there hadn’t been a fund long CPAC since the first quarter of 2018, which also happened to be Renaissance Technologies with a similarly small stake.
10. G. Willi-Food International Limited (NASDAQ:WILC)
Number of Hedge Fund Shareholders: 2
Annual Dividend Payout: $0.87
After making a single dividend payment last year, G. Willi-Food International Limited (NASDAQ:WILC) officially began making semi-annual payments this year, which totaled $0.87, giving WILC shares a yield of 6.43%. G. Willi-Food International Limited (NASDAQ:WILC) has become much more profitable in recent years, which has allowed the company to begin rewarding shareholders with payouts.
The Israel-based food products distributor rarely topped $0.50 in EPS between 2009 and 2018 and never earned more than 0.79 per share. It’s topped $1.00 in EPS over each of the last three years however, including $1.21 in 2020. It’s also had its two best years in terms of EBITDA over each of the last two years, pulling in $20 million and $18 million respectively.
The same two funds have been long G. Willi-Food International Limited (NASDAQ:WILC) dating back seven quarters: Jim Simon’s Renaissance Technologies and Brian Gaines’ Springhouse Capital Management. The latter has held a stake in the company since late 2015, while RenTech’s ownership stretches back to at least 2010.
9. Sasol Limited (NYSE:SSL)
Number of Hedge Fund Shareholders: 5
Annual Dividend Payout: $0.8578
After halting its semi-annual dividend payments in 2019, South African energy and chemicals company Sasol Limited (NYSE:SSL) relaunched an annual dividend this year, which paid out $0.8578 on September 23, giving shares a yield of close to 5%. The latest payout was well beneath the company’s historical annual payments, and could rise in the years to come.
Sasol Limited (NYSE:SSL)’s net income has quadrupled in the last year to $2.7 billion, which the company has primarily used to pay down its mountain of debt, which was partly incurred due to massive cost overruns in the building of its Lake Charles Chemicals Project in Louisiana. With that project complete and the company’s balance sheet rebounding, shareholders could be the big beneficiaries of all that net income in the years to come.
Hedge fund ownership of Sasol Limited (NYSE:SSL) has been cut in half since the end of 2020, with Donald Sussman’s Paloma Partners and Israel Englander’s Millennium Management among the funds to sell off SSL during that time. Peter Rathjens, Bruce Clark, and John Campbell’s Arrowstreet Capital owns the largest position in Sasol as of June 30, holding 2.25 million shares.
8. Shenandoah Telecommunications Company (NASDAQ:SHEN)
Number of Hedge Fund Shareholders: 6
Annual Dividend Payout: $0.08
Shenandoah Telecommunications Company (NASDAQ:SHEN) slashed its annual dividend payments from $0.34 to $0.07 last year after the telecommunications company sold off its wireless assets and operations to T-Mobile US, Inc. (NASDAQ:TMUS) for $1.95 billion as it shifts to a fiber-first strategy. $937 million of that windfall was distributed to shareholders through a special dividend last year.
Shenandoah Telecommunications Company (NASDAQ:SHEN) shareholders won’t have the benefit of such a special payout this year however, though the annual dividend was hiked ever so slightly to $0.08. The company, which operates in six U.S. states, had grown revenue by nearly 18% over the past five years, but will now operate with a narrower focus that the company believes will pay off in the long-term. Q2 revenue was $66 million, topping estimates, while the company registered a $0.06 loss per share in earnings.
Hedge funds have been bailing on Shenandoah Telecommunications Company (NASDAQ:SHEN) in droves in recent years, with ownership of the stock falling by 70% since the middle of 2019. Ken Griffin’s Citadel Investment owns 250,979 shares of SHEN as of June 30 after selling off 57% of its holding during Q2.
7. RELX PLC (NYSE:RELX)
Number of Hedge Fund Shareholders: 9
Annual Dividend Payout: $0.6245
RELX PLC (NYSE:RELX) makes semi-annual variable dividend payments, which amounted to $0.6255 since this year, down from $0.6673 last year. The shares of the British analytics company have a solid dividend yield of 2.29% and the company has made dividend payments for 13 consecutive years.
RELX PLC (NYSE:RELX) announced in earlier this month that it expects its FY22 profit to be above historical trends thanks to strong performances from its risk, scientific, technical & medical business, but particularly from its exhibitions business, which had an 85% year-over-year boost in underlying revenue growth thanks to live events recovering from pandemic restrictions. RELX’s net income grew by 14.6% in the June quarter.
RELX PLC (NYSE:RELX) is sitting at an all-time high in hedge fund ownership, with more than double the amount of funds being long the company on June 30 as there were five quarters earlier. Paul Tudor Jones’ Tudor Investment Corp and Israel Englander’s Millennium Management are two prominent funds that have built stakes in RELX in recent quarters.
6. National Western Life Group Inc. (NASDAQ:NWLI)
Number of Hedge Fund Shareholders: 12
Annual Dividend Payout: $0.36
The first part of the list is closed out by National Western Life Group Inc. (NASDAQ:NWLI), which has a remarkable, if somewhat auspicious track record of annual dividend payments. The company has made the same $0.36 annual payment to its shareholders every year since 2006. Unfortunately for the company’s long-term shareholders, the stock itself has seen about the same amount of share price growth during that 17-year span, being down by 4.3% since the end of 2005.
National Western Life Group Inc. (NASDAQ:NWLI), which is the parent company of an insurance company which itself is the parent company of another insurance company (yes, things can and have gotten even weirder on the NWLI front), delivered consolidated net earnings of $18.93 per diluted Class A share during the first half of 2022, down from $31.68 a year earlier. The company had consolidated total assets of $13.3 billion as of June 30.
There was a big jump in hedge fund ownership of National Western Life Group Inc. (NASDAQ:NWLI) during the third quarter of 2021 and ownership of the stock has remained at elevated positions in the quarters since. Paul J. Isaac’s Arbiter Partners Capital Management owns the most bullish NWLI stake among the funds tracked by our database, having 2.37% 13F exposure to the stock through owning 18,824 shares.
CRH plc (NYSE:CRH), News Corporation (NASDAQ:NWS), and Cameco Corporation (NYSE:CCJ) are some higher profile annual dividend stocks for investors to consider, check them out at the link below.
5. CRH plc (NYSE:CRH)
Number of Hedge Fund Shareholders: 12
Annual Dividend Payout: $1.1948
CRH plc (NYSE:CRH) has grown its semi-annual dividend payments for three straight years, with them having a greater than 10% CAGR over the past five years. The building materials company has showcased reduced cyclicality and stronger resilience than more pure-play materials producers according to Citi analyst Ephrem Ravi, who has a ‘Buy’ rating on the shares. The analyst also likes the Irish’s company’s strong cash generation, which should fuel further dividend growth.
Hedge fund ownership of CRH plc (NYSE:CRH) hit an all-time high in Q2, jumping by 30% quarter-over-quarter. One of the new Q2 stakes was purchased by Edgar Wachenheim’s Greenhaven Associates, which raised its position in CRH by another 139% in Q3 to 1.79 million shares worth $57.9 million on September 30.
L1 Capital International believes the value of the current investment opportunity in CRH plc (NYSE:CRH) is a rare occurrence, as the fund discussed in its Q2 2022 investor letter:
“CRH plc (NYSE:CRH) was outlined in detail in our December 2021 Quarterly Report. Since then, the tragic war in Ukraine commenced with no signs of resolution. This war and associated sanctions on Russia have led to major disruptions to European energy markets. CRH is a relatively energy intensive business and around 20% of the Group’s operations are in Europe. We expect they will be negatively impacted by higher energy prices and reduced economic activity. Around 75% of CRH’s operations are in North America and will be less impacted compared to the European operations.
We have followed and analysed the global building products industry for nearly 25 years and the current share price of CRH presents an investment opportunity that rarely arises. CRH recently sold a business for US$3.8 billion, equating to almost 15x EBIT. In comparison, the remainder of CRH which consists of many businesses which are higher quality than the divested operation, is trading on around 9x EBIT, 11x PE, 9% free cashflow, 4% dividend yield and CRH is buying back around 3% of its shares annually. CRH has delivered shareholders a 15% return per annum, compounded over 50 years. The current share price provides compelling value for investors with a longer-term horizon.”
4. Woodside Energy Group ADR (NYSE:WDS)
Number of Hedge Fund Shareholders: 12
Annual Dividend Payout: $2.14
Woodside Energy Group ADR (NYSE:WDS) is one of the more compelling dividend stocks on this list, with a robust 9.16% dividend yield and an impressive dividend CAGR of 16.9% over the past five years. That growth was entirely thanks to a massive raise to its semi-annual dividend payments this year, which totaled $2.14 compared to just $0.42 a year ago.
The Australian petroleum E&P company surged most major metrics by triple digits year-over-year in the June quarter, growing revenue by 132% to $2.9 billion, net income by 417% to $820 million, and diluted EPS by 324% to $0.72.
There was a hedge fund buying spree of Woodside Energy Group ADR (NYSE:WDS) shares during Q2 following the company’s merger with the oil and gas assets of BHP Group (NYSE:BHP). Billionaire money managers Ken Fisher, Ken Griffin, and Steve Cohen were among the group of investors that added WDS to their 13F portfolios during the quarter.
3. Marcus & Millichap Inc (NYSE:MMI)
Number of Hedge Fund Shareholders: 13
Annual Dividend Payout: $0.50
Marcus & Millichap Inc (NYSE:MMI) began making semi-annual dividend payments this year, with each amounting to $0.25 (it also issued a special dividend payment of $1.00 on April 4). That starts the stock off with a decent dividend yield of 1.35% and there’s immense room for future dividend growth given the company’s miniscule payout ratio of just under 6%. The commercial property services provider also authorized a $70 million share repurchase program in August on the heels of record Q2 results.
For the quarter, Marcus & Millichap Inc (NYSE:MMI) grew revenue by 39% year-over-year to nearly $400 million, while net income surged by 34% to $42 million. The company enjoyed strong growth across several of its businesses, with its private client business growing by 33% year-over-year, while its financing business grew by 31%. Lastly, it grew Middle Market and larger transactions by 59% during the quarter.
Since hitting a six-year low in hedge fund ownership during the third quarter of 2020, the number of smart money managers long Marcus & Millichap Inc (NYSE:MMI) has more than doubled. Chuck Royce’s Royce & Associates, which has held a position in the company since early 2014, owned 1.58 million MMI shares on June 30, valued at $58.6 million.
2. Cameco Corporation (NYSE:CCJ)
Number of Hedge Fund Shareholders: 40
Annual Dividend Payout: $0.0946
Canadian uranium mining company Cameco Corporation (NYSE:CCJ) grew its annual dividend payment by 51% this year to $0.0946. While the company’s dividend won’t set the world on fire with its 0.39% dividend yield, there’s room for growth given the company’s 24% payout ratio and the company has a lot going for it besides its dividend.
In October, Cameco announced the acquisition of a 49% stake in nuclear products and services company Westinghouse Electric for $2.2 billion plus debt, with partner Brookfield Renewable Partners taking on the remaining ownership stake. Given the constricted state of the energy market should provide tailwinds for both uranium and nuclear companies, it’s a move that could pay big dividends for Cameco down the line; leading to potentially bigger dividends for the company’s shareholders as well.
Hedge fund ownership of Cameco Corporation (NYSE:CCJ) has surged by 60% over the last year, hitting an all-time high in Q1 of this year. Several funds are extremely bullish on the company, each having greater than 9% 13F exposure to the stock as of June 30. One of them is David Iben’s Kopernik Global Investors, which owns 4.19 million shares valued at over $88 million.
Aristotle Capital is bullish on Cameco Corporation (NYSE:CCJ)’s disciplined approach to increasing its production volumes, as outlined in the fund’s Q2 2022 investor letter:
“After making a strong run in the beginning of the year, Cameco Corporation (NYSE:CCJ), the world’s largest publicly traded uranium producer, was a primary detractor for the quarter. As countries focus on energy security and increasingly rely on nuclear energy, market dynamics are shifting in Cameco’s favor. Supply has tightened as the developed world pivots from Russia, a large supplier of uranium, while demand for non-Russia-linked uranium has increased. While we recognize there has been, and will likely continue to be, short-term volatility in uranium prices, we admire Cameco’s prior actions of operational discipline, which we believe have positioned the company to benefit from the current market dynamics. Cameco remains focused on prudently and profitably increasing production of its Canada-based assets, including an increase of its ownership stake in the Cigar Lake joint venture, as well as the planned start of production at the McArthur River/Key Lake mines in 2024. As these operations come online, we believe Cameco will be able to meet its utilities customers’ demand for long-term supply at higher equilibrium prices.”
1. News Corporation (NASDAQ:NWS)
Number of Hedge Fund Shareholders: 48
Annual Dividend Payout: $0.20
Topping the list of best annual dividend stocks is News Corporation (NASDAQ:NWS), which had made $0.10 semi-annual dividend payments since 2016. Despite a payout ratio of less than 17%, the diversified entertainment and media company appears to be in no hurry to raise its payouts to shareholders, which currently yield 1.17%.
The company has been attempting to shed slower-growing assets like its streaming division, and it’s possible it may consider unloading its book publishing division HarperCollins. Should moves like that materialize and the company feels it’s in a stronger financial position, it may decide to revisit its dividend policy, but until then potential investors shouldn’t expect anything on that front.
News Corporation (NASDAQ:NWS) tops the list in terms of popularity among hedge funds, though ownership of the stock is down by 40% since 2013. Value investor Donald Yacktman’s Yacktman Asset Management owns the most substantial stake in NWS as of June 30, holding 16.5 million shares worth $256 million.
L1 Capital is also bullish on News Corporation (NASDAQ:NWS), believing the company’s collection of assets are being mispriced by the market, as revealed in the fund’s Q2 2022 investor letter:
“News Corporation (NASDAQ:NWS) (Long -26%) shares fell over the quarter despite reporting third quarter results in line with consensus expectations. The decline was primarily driven by a softening in investor sentiment towards News Corp’s Digital Real Estate assets against a backdrop of rising interest rates in both Australia and the U.S., with REA Group shares down 17% during the quarter. While concerns over property market drivers are likely to continue in the near term, we see both REA Group and Move as being well positioned to structurally improve their businesses through this period. We continue to believe the News Corp assets are materially under-valued and remain supportive of ongoing initiatives to unlock value across the Group.”
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Disclosure: None. 12 Best Annual Dividend Stocks To Buy Now is originally published at Insider Monkey.
