In this article, we will take a look at the 5 Best Blue Chip Dividend Stocks to Buy According to Hedge Funds. For a deeper discussion and analysis, please refer to the 14 Best Blue Chip Dividend Stocks to Buy According to Hedge Funds.
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5. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 72
Dividend Yield as of July 5: 4.10%
PepsiCo, Inc. (NASDAQ:PEP) engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide.
On July 1, JPMorgan lowered its price recommendation on PepsiCo, Inc. (NASDAQ:PEP) from $178 to $170, but kept an ‘Overweight’ rating on the shares. The revised target, which still implies an upside of almost 18% from the current price level, comes ahead of the company’s Q2 earnings report on July 9.
JPMorgan trimmed its Q2 estimates for PepsiCo, Inc. (NASDAQ:PEP) to reflect the lower price and product mix assumptions. That said, the analyst firm highlighted Pepsi’s strong track record of rarely falling behind earnings estimates, and with recent channel data remaining weak, investor expectations for the quarter are already low.
PepsiCo, Inc. (NASDAQ:PEP) is expecting its organic revenue to increase between 2% to 4% in FY 2026, while it is guiding a core constant currency EPS growth in the range of 4% to 6% for the year. The company is also targeting shareholder returns of approximately $8.9 billion, including $7.9 billion of dividends and $1 billion of share repurchases.
4. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 78
Dividend Yield as of July 5: 3.23%
Philip Morris International Inc. (NYSE:PM) operates as a global tobacco company. Its products include cigarettes and smoke-free alternatives. Its smoke-free business also covers wellness and healthcare products, along with consumer accessories such as lighters and matches.
On July 2, UBS upped its price recommendation on Philip Morris International Inc. (NYSE:PM) from $168 to $182, while maintaining a ‘Neutral’ rating on the shares.
With smoking rates falling with every passing year, Philip Morris International Inc. (NYSE:PM) is rapidly shifting from a legacy cigarette company into a high-margin consumer staples compounder driven by next-gen nicotine products. The company’s smoke-free products are now responsible for roughly 41% of its revenue, with gross margins near 69.5%. Additionally, the contribution from alternative products like IQOS and ZYN has effectively doubled, marking a structural mix shift rather than a cyclical improvement.
Philip Morris International Inc. (NYSE:PM) is also known for its strong commitment to shareholders. The tobacco giant has grown its annual dividend every year since becoming a public company in 2008, representing a total increase of 219.6%, or a CAGR of 7.1%.
3. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 78
Dividend Yield as of July 5: 5.55%
Comcast Corporation (NASDAQ:CMCSA) delivers industry-leading broadband, mobile, and entertainment platforms that power incredible experiences for customers globally.
On June 30, Deutsche Bank analyst Bryan Kraft upgraded Comcast Corporation (NASDAQ:CMCSA) from ‘Hold’ to ‘Buy’, but reduced the firm’s price target on the stock from $34 to $32. The lowered estimate still reflects a robust upside of over 34% from the current levels.
The analyst believes that Comcast’s planned split into two independent publicly traded companies could unlock additional shareholder value. Deutsche Bank upgraded the stock after changing its valuation approach from a market-based discounted cash flow model to a sum-of-the-parts analysis, which points to greater value creation.
In a major announcement on June 29, Comcast Corporation (NASDAQ:CMCSA) revealed its plans to spin off NBCUniversal into a separate publicly traded company, which will include the Universal Pictures film studio, the NBC and Telemundo broadcast networks, NBC News, the streaming service Peacock, the cable channel Bravo, a lucrative theme parks division, and Sky. Meanwhile, Comcast will focus solely on providing broadband, cable, and wireless services to business and residential customers.
The company expects the split to be completed within a year.
2. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 94
Dividend Yield as of July 5: 3.01%
Exxon Mobil Corporation (NYSE:XOM) is one of the largest integrated fuels, lubricants, and chemical companies in the world.
On July 2, TD Cowen trimmed its price target on Exxon Mobil Corporation (NYSE:XOM) from $172 to $155, but reiterated a ‘Buy’ rating on the shares. The lowered estimate, which still indicates an upside of 13% from the current levels, comes after the analyst firm revised its targets in the oil majors space as part of a Q2 earnings preview.
TD Cowen believes that the recent “rapid correction” in crude oil prices and equities following the signing of an MoU between the US and Iran has created “pockets of opportunity” in the sector. The firm said that it prefers Shell, Chevron, and TotalEnergies as we head into the Q2 earnings season.
Exxon Mobil Corporation (NYSE:XOM) has grown its annual dividend-per-share for 43 consecutive years and boasts a robust yield of 3.01% as of the writing of this piece, putting it among the 12 Best S&P 500 Stocks to Buy for Dividends.
1. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 103
Dividend Yield as of July 5: 4.21%
Topping our list of the Best Blue Chip Dividend Stocks is Chevron Corporation (NYSE:CVX). The company manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives.
On July 2, Wolfe Research analyst Doug Leggate upgraded Chevron Corporation (NYSE:CVX) from ‘Peer Perform’ to ‘Outperform’ and assigned the stock a price objective of $210, implying an upside of over 25% from the current levels.
Chevron hit an all-time high at the end of March and has since fallen by almost 20%. According to Wolfe Research, the stock’s sharp rise and subsequent pullback so far this year have “masked several key changes that improve the investment case”. The analyst also highlighted the incremental production options that Chevron has secured since the beginning of the year, which it believes extend the energy giant’s free cash flow growth trajectory well beyond 2030.
According to Wolfe, the recent pullback in CVX provides an attractive entry point for investors looking to increase exposure to the energy sector, with Chevron positioned to outperform its major oil peers.
Meanwhile, earlier on June 29, Morgan Stanley lowered its price target on Chevron Corporation (NYSE:CVX) by $5 but reiterated its ‘Overweight’ rating on the shares (read more details here).
While we acknowledge the potential of CVX to grow, 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 CVX and that has 100x upside potential, check out our report about the cheapest AI stock.
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