In this article, we will be taking a look at the 11 dividend aristocrats with over 3% yield.
When it comes to dividend investing, one must almost always consider it a long-term strategy, since many companies only pay their shareholders on a once-per-quarter basis, with dividend yields being calculated annually. As such, if a dividend investor does not stay for a certain period of time, the full income potential of a stock may go unrealized. Additionally, when it comes to dividend investing, other metrics aside from attractive yields can be considerably useful in determining which stock would best fit their portfolio for investors, both current and aspiring. Some of the defining metrics investors use in their decisions include payout ratio and price-to-book ratio, as well as the frequency of dividend increase over set periods of time.
What are Dividend Aristocrats?
A Dividend Aristocrat refers to a publicly traded company that has consistently paid dividends every year to its investors, as well as increased its dividend yields for the past 25 years or more. According to a research conducted by S&P Global, Dividend growth stocks, particularly High Yield Dividend Aristocrats, have outperformed the market consistently since the time period of 1999-2021, providing protection against market volatility. Some of the most solid stock picks that have been known to increase their dividends for a sizeable period of time include The Procter & Gamble Company (NYSE:PG), The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and Chevron Corporation (NYSE:CVX).
Photo by Sharon McCutcheon on Unsplash
Our Methodology
For our list, we have selected dividend aristocrat stocks with yields of over 3%. Using the data tracked by Insider Monkey of about 873 hedge funds, we picked dividend stocks that are highly popular among these hedge funds today. For each stock we have mentioned its yield, along with the number of hedge funds holding a stake in it, ranking them based on their dividend yields. Lastly, we have made use of analyst ratings to determine which stocks are most favorable, largely based on positive ratings.
Why should we pay attention to hedge fund sentiment when choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
11 Best Dividend Aristocrats with over 3% Yield
11. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 62
Dividend Yield: 3.17%
The Coca-Cola Company is a multinational Georgia-based beverage corporation that engages in the manufacturing, retailing and marketing of syrups and beverages. The company ranks eleventh on our list of the 11 best dividend aristocrats with over 3% yield.
In the second quarter of 2021, The Coca-Cola Company reported an EPS of $0.68, beating estimates by $0.12. The company’s revenue for the quarter came in at $10.13 billion, an increase of 42% on a year-over-year basis, and beat revenue estimates by $823.1 million. The stock has gained 11.22% in the past twelve months.
On July 22, Truist analyst Bill Chappell maintained a Buy rating on The Coca-Cola Company and increased his price target for the stock to $65 from $60.
By the end of the second quarter of 2021, 62 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Coca-Cola Company worth roughly $24.96 billion. This is compared to 61 hedge funds in the previous quarter with a total stake value of approximately $24.90 billion.
10. Merck & Company, Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 79
Dividend Yield: 3.19%
Merck & Company, Inc. is a multinational pharmaceutical company that provides a wide array of health solutions and products. Ranked tenth on our list of the 11 best dividend aristocrats with over 3% yield, the New-Jersey based company has a market capitalization of $206.56 billion.
In the second quarter of 2021, Merck & Company, Inc. reported earnings per share at $1.31, missing the forecast estimates by $0.04. The company’s revenue was $11.40 billion, beating market estimates by $208.55 million.
On October 1, Citi analyst Andrew Baum reiterated a Buy rating on the shares of Merck & Company, Inc., alongside $105 price target.
By the end of the second quarter of 2021, 79 hedge funds out of the 873 tracked by Insider Monkey held stakes in Merck & Company, Inc. worth more than $5.29 billion. This is compared to 79 hedge funds in the previous quarter with a total stake value of approximately $6.5 billion.
Much like The Procter & Gamble Company, The Coca-Cola Company, Johnson & Johnson, and Chevron Corporation, Merck & Company, Inc. is a notable stock to invest in.
9. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 58
Dividend Yield: 3.22%
Lockheed Martin Corporation (NYSE:LMT) is an American aerospace, security and technology corporation. Based in Maryland, the company researches, designs and manufactures technology systems and products worldwide. The aerospace company ranks ninth on our list of the 11 best dividend aristocrats with over 3% yield.
On September 27, Morgan Stanley analyst Kristine Liwag reiterated an Overweight rating and $458 price target on the shares of Lockheed Martin Corporation.
By the end of the second quarter of 2021, 58 hedge funds out of the 873 tracked by Insider Monkey held stakes in Lockheed Martin Corporation worth roughly $1.6 billion. This is compared to 50 hedge funds in the previous quarter with a total stake value of approximately $2.3 billion.
On July 26, Lockheed Martin Corporation issued its quarterly earnings report, with an EPS of $6.52, in-line with the estimates for the quarter. The company’s revenue was reported at $17.03 billion, beating market estimates by $89.10 million.
In its Q4 2020 investor letter, RiverPark Advisers, LLC. shared their expectations of greater shareholder returns from Lockheed Martin Corporation. Here is what the fund had to say:
“Despite better-than-expected third quarter results, LMT shares were weak for the quarter as defense spending is expected to be flat for the coming year. With a record $150 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year in 4-5 years (3Q’s revenue upside was from the F-35), we believe LMT should grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions (LMT acquired AJRD for $4 billion in late December), debt pay down, a 3% dividend yield, and continued share buybacks from $6 billion per year of free cash flow should lead to even greater shareholder returns.”
8. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 73
Dividend Yield: 3.31%
Bristol-Myers Squibb Company (NYSE:BMY) is a biopharmaceutical company that researches and manufactures prescription biopharmaceuticals for global distribution. The company ranks eighth on our list of the 11 best dividend aristocrats with over 3% yield.
The company released its quarterly earnings report on July 28, with reported earnings per share of $1.93, beating estimates by $0.03. The reported revenue for the quarter was $11.70 billion, surpassing the predicted revenues by $474.30 million.
By the end of the second quarter of 2021, 73 hedge funds out of the 873 tracked by Insider Monkey held stakes in Bristol-Myers Squibb Company worth roughly $5.2 billion. This is compared to 81 hedge funds in the previous quarter with a total stake value of approximately $5 billion.
On July 26, Truist analyst Robyn Karnauskas began coverage of Bristol-Myers Squibb Company with a Buy rating and $74 price target.
7. General Mills, Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 37
Dividend Yield: 3.33%
General Mills, Inc. (NYSE:GIS) is a multinational manufacturer and marketer of packaged consumer goods. Based in Minnesota, the company has a market capitalization of $37.14 billion and ranks seventh on our list of the 11 best dividend aristocrats with over 3% yield.
General Mills, Inc. last issued its quarterly earnings report on September 22, with a reported EPS at $0.99, beating market estimates by $0.10. The revenue declared for the quarter amounted to $4.54 billion, surpassing estimates by $238.36 million.
On October 10, Citi analyst Wendy Nicholson upgraded General Mills, Inc. to Buy from Neutral rating, with a price target of $70 on its shares, up from $63.
By the end of the second quarter of 2021, 37 hedge funds out of the 873 tracked by Insider Monkey held stakes in General Mills, Inc. worth roughly $744.9 million. This is compared to 31 hedge funds in the previous quarter with a total stake value of approximately $797 million.
Much like The Procter & Gamble Company, The Coca-Cola Company, Johnson & Johnson, and Chevron Corporation, General Mills, Inc. is a decent stock to invest in.
6. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 42
Dividend Yield: 3.36%
3M Company (NYSE:MMM) is a multinational conglomerate based in Minnesota. The company operates through its four business sectors: Industry, Healthcare, Electrics and Consumer goods. The company has a market capitalization of $101.64 billion, and ranks sixth on our list of the 11 best dividend aristocrats with over 3% yield.
In its second quarter earnings report of 2021, 3M Company declared an EPS of $2.59, beating estimates by $0.30. The company’s revenue was $8.95 billion, an increase of 24.72% on a year-over-year basis, surpassing market estimates by $371.42 million.
On July 28, Argus analyst John Eade raised his price target on 3M Company to $225 from $220, and kept a Buy rating on the shares of the company.
By the end of the second quarter of 2021, 42 hedge funds out of the 873 tracked by Insider Monkey held stakes in 3M Company worth roughly $1.58 billion. This is compared to 41 hedge funds in the preceding quarter with a total stake value of about $1.51 billion.
Much like The Procter & Gamble Company, The Coca-Cola Company, Johnson & Johnson, and Chevron Corporation, 3M Company is a good stock to invest in.
5. Kellogg Company (NYSE:K)
Number of Hedge Fund Holders: 32
Dividend Yield: 3.68%
Kellogg Company (NYSE:K) is a multinational plant-based food manufacturing company based in Michigan. Specializing in ready-to-eat cereals, among other breakfast staples, the company ranks fifth on our list of the 11 best dividend aristocrats with over 3% yield.
For the second quarter of 2021, Kellogg Company reported earnings per share at $1.14, beating the forecast estimates by $0.11. The company’s revenue for the quarter was $3.56 billion, beating market estimates by $123.56 million.
On September 21, Morgan Stanley analyst Pamela Kaufman assumed coverage of Kellogg Company with an Equal Weight rating alongside a price target of $64 on its shares.
By the end of the second quarter of 2021, 32 hedge funds out of the 873 tracked by Insider Monkey held stakes in Kellogg Company worth roughly $482.8 million. The number of hedge funds that held stakes within the company remained unchanged through the first and second quarters of 2021.
Out of the hedge funds being tracked by Insider Monkey, the Boston-based investment firm, Arrowstreet Capital, is among the leading shareholders in Kellogg Company with 1.76 million share worth $113.5 million.
4. Cardinal Health, Inc. (NYSE:CAH)
Number of Hedge Fund Holders: 40
Dividend Yield: 4.03%
Cardinal Health, Inc. (NYSE:CAH) is a multinational Healthcare services company that provides pharmaceutical products and medical services to pharmacies and hospitals. Headquartered in Ohio, the Healthcare company comes in at fourth on our list of the 11 best dividend aristocrats with over 3% yield.
In August of 2021, Deutsche Bank kept a Hold rating on shares of Cardinal Health, Inc., alongside a price target of $51.
The company last released its quarterly earnings report on August 5, with reported earnings per share of $0.77, missing estimates by $0.43. The company’s revenue came in at $42.59 billion, surpassing the estimated revenue by $2.37 billion.
By the end of the second quarter of 2021, 40 hedge funds out of the 873 tracked by Insider Monkey held stakes in Cardinal Health, Inc. worth roughly $897 million. This is compared to 39 hedge funds in the previous quarter with a total stake value of approximately $967 million.
3. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 41
Dividend Yield: 4.09%
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a holding company that owns and operates the retail pharmacy chains named Walgreens and Boots, among other pharmaceutical manufacturing companies. Ranked third on our list of the 11 best dividend aristocrats with over 3% yield, Walgreens Boots Alliance, Inc. has a market capitalization of $40.27 billion.
This August, Barclays analyst Steve Valiquette held a $53 price target on Walgreens Boots Alliance, Inc. alongside an Equal Weight rating on the shares of the company.
By the end of the second quarter of 2021, 41 hedge funds out of the 873 tracked by Insider Monkey held stakes in Walgreens Boots Alliance, Inc. worth roughly $1.1 billion. This is compared to 41 hedge funds in the previous quarter with a total stake value of approximately $1.1 billion.
On July 1, Walgreens Boots Alliance, Inc. issued its quarterly earnings report, declaring its EPS at $1.38, beating estimates by $0.23, while the company’s revenue was reported to be $34.03 billion, crossing estimates by $526.6 million.
2. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 55
Dividend Yield: 4.13%
Newmont Corporation (NYSE:NEM) is a Colorado-based materials company involved in the production and exploration of precious metals and minerals, including gold, silver and zinc, among others. The company ranks second on our list of the 11 best dividend aristocrats with over 3% yield.
In the second quarter of 2021, Newmont Corporation had an EPS of $0.83, beating estimates by $0.06. The company’s revenue was $3.06 billion, an increase of over 29.6% on a year-over-year basis, although missing the predicted revenues by $47.30 million.
By the end of the second quarter of 2021, 55 hedge funds out of the 873 tracked by Insider Monkey held stakes in Newmont Corporation worth roughly $1.3 billion. This is compared to 43 hedge funds in the previous quarter with a total stake value of approximately $994 million.
This September, KeyBanc analyst Adam Josephson initiated coverage of Newmont Corporation with a Sector Weight rating on its shares.
Out of the hedge funds being tracked by Insider Monkey, New York-based First Eagle Investment Management is a leading shareholder in Newmont Corporation with 18.4 million share worth $1.16 billion.
1. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 33
Dividend Yield: 4.31%
The Kraft Heinz Company (NASDAQ:KHC), more commonly known simply as Kraft Heinz, is one of the world’s leading food and beverage companies. The Illinoi-based company ranks first on our list of the 11 best dividend aristocrats with over 3% yield.
By the end of the second quarter of 2021, 33 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Kraft Heinz Company worth roughly $13.57 billion. The number of hedge funds that held stakes within the company remained the same for the first and second quarter of 2021.
On September 21, Morgan Stanley analyst Pamela Kaufman initiated coverage of The Kraft Heinz Company with an Equal Weight rating alongside a price target of $37 on its shares.
On August 4, the company issued its quarterly earnings report for the second quarter of 2021, with earnings per share at $0.78, crossing market estimates by $0.06. Additionally, the revenue for the quarter came in at $6.62 billion, surpassing the predicted revenue by $65.74 million.
Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway is a leading shareholder in The Kraft Heinz Company with 325.6 million shares worth over $13.2 billion.
You can also take a look at 10 Best Undervalued Stocks to Buy Now According to Reddit and 10 Best Undervalued Dividend Stocks to Buy Now.
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This article is originally published at Insider Monkey.
