15 Best Dividend Stocks To Buy and Hold

In this article, we discuss 15 best dividend stocks to buy and hold.

Growth stocks were all the rage in the mid-20^th century because they offered more potential for capital appreciation. In recent years, however, dividend stocks have witnessed a renewed interest as investors have become more focused on income generation and risk management. Dividend stocks can provide some stability and downside protection in times of market volatility. Companies in the S&P 500 distributed a record $565 billion in dividend payments in 2022, a year that was one of the most challenging periods for the stock market.

Analysts gave a positive stance about dividend growth this year as well. However, recent events surrounding Silicon Valley Bank (SVB) collapse have cast doubts on the performance of dividend stocks in 2023. Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices, previously estimated dividends to grow by 6% to 7.5% this year. The analyst now anticipates a modest dividend growth of about 5%, which would still result in record payouts but is less than what he projected earlier this year. The bank turmoil has affected future spending for both consumers and companies, which may hinder dividend growth as well. Last month’s performance of the market also shows the impact of the bank’s failure on dividend payments. From March 8 through April 18, the S&P 500 gained 4% on the banks of tech companies that pay less in dividends, as reported by Barron’s. Nevertheless, dividend stocks that have raised their payouts over time are still delivering stable returns. The S&P 500 Dividend Aristocrat Index, which tracks the performance of companies with dividend growth tracks of 25 years or more, is up 2.05% year-to-date and gained 8.69% in the last six months.

Investors are still loading up on dividend stocks this year due to high inflation and fluctuating market conditions. Dividend-focused exchange-traded funds are especially gaining fame among investors because of their long-term growth potential, diversification, and professional management. According to a report by Wall Street Journal, there are currently 180 US dividend ETFs, with total assets worth over $384 billion. As of April 14, investors have poured over $2.8 billion into ETFs that purchase dividend-paying stocks. The report also highlighted that dividends are a good inflation hedge as S&P 500 dividend growth has outpaced inflation from 2000 through March 2023.

Some of the best dividend stocks that have grabbed investors’ attention include McDonald’s Corporation (NYSE:MCD), Hormel Foods Corporation (NYSE:HRL), and Roper Technologies, Inc. (NYSE:ROP). In this article, we will discuss 15 best dividend stocks to buy and hold.

Photo by buian_photos on Unsplash

Our Methodology:

For this list, we scanned through various credible sources, including Business Insider, Forbes, Morningstar, and Barron’s, and identified their consensus picks from their recent articles. Next, we sorted these companies based on the number of hedge funds in Insider Monkey’s database that owned stakes in these companies.

Best Dividend Stocks To Buy and Hold

15. Consolidated Edison, Inc. (NYSE:ED)

Number of Hedge Fund Holders: 25 

Dividend Yield as of April 21: 3.27%

Consolidated Edison, Inc. (NYSE:ED) is a New York-based energy company that operates energy delivery systems and steam services for its consumers. In March, Argus upgraded the stock to Buy with a $104 price target, expecting the company to benefit from higher rates and tax credits.

On April 20, Consolidated Edison, Inc. declared a quarterly dividend of $0.81 per share, which fell in line with its previous dividend. In 2023, the company stretched its dividend growth streak to 49 years, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 3.27%, as of April 21. Other best dividend stocks include McDonald’s Corporation, Hormel Foods Corporation, and Roper Technologies, Inc..

At the end of Q4 2022, 25 hedge funds in Insider Monkey’s database reported having investments in Consolidated Edison, Inc., worth over $460 million collectively. AQR Capital Management was the company’s leading stakeholder in Q4.

14. Pentair plc (NYSE:PNR)

Number of Hedge Fund Holders: 29

Dividend Yield as of April 21: 1.65%

Pentair plc (NYSE:PNR) is an American water treatment company, based in Minnesota. The company also manufactures thermal management products for its customers. The company currently offers a quarterly dividend of $0.22 per share for a dividend yield of 1.65%, as of April 21. It is one of the best dividend stocks on our list as it has raised its payouts for 47 years in a row.

Pentair plc (NYSE:PNR) reported a strong cash position in the fourth quarter of 2022. The company’s operating cash flow for the quarter came in at $364 million and it generated over $283 million in free cash flow.

At the end of Q4 2022, 29 hedge funds tracked by Insider Monkey reported having stakes in Pentair plc (NYSE:PNR), the same as in the previous quarter. The collective value of these stakes is over $1.15 billion. Among these hedge funds, Impax Asset Management was the company’s leading stakeholder in Q4.

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

Number of Hedge Fund Holders: 34

Dividend Yield as of April 21: 2.22%

Illinois Tool Works Inc. (NYSE:ITW) is an Illinois-based manufacturing company that mainly deals in consumables and specialty products. Following the company’s Q4 earnings, strong revenues, and organic growth, UBS raised its price target on the stock to $245 and maintained a Neutral rating on the shares.

Illinois Tool Works Inc., one of the best dividend stocks, currently pays a quarterly dividend of $1.31 per share. The company is a Dividend King as it has raised its payouts consistently for the past 50 years. The stock has a dividend yield of 2.22%, as of April 21.

As of the close of Q4 2022, 34 hedge funds owned stakes in Illinois Tool Works Inc., up from 27 in the previous quarter. These stakes have a collective value of over $1.04 billion. Among these hedge funds, Adage Capital Management owned the largest stake in the company, worth over $95 million.

12. Carlisle Companies Incorporated (NYSE:CSL)

Number of Hedge Fund Holders: 41

Dividend Yield as of April 21: 1.37%

Carlisle Companies Incorporated (NYSE:CSL) is an American diversified manufacturing company that deals in a wide range of products belonging to different markets. In the fourth quarter of 2022, the company reported revenue of $1.45 billion, which showed a 3.6% growth from the same period last year. The company’s cash position remained strong during FY22 as it posted over $1 billion in operating cash flow and over $595 million in free cash flow. It paid $134.4 million in dividends to shareholders during the year, which makes it one of the best dividend stocks on our list.

Carlisle Companies Incorporated has been raising its dividends consistently for the past 46 years. The company currently offers a quarterly dividend of $0.75 per share and has a dividend yield of 1.37%, as of April 21.

As of the close of Q4 2022, 41 hedge funds in Insider Monkey’s database owned stakes in Carlisle Companies Incorporated, worth roughly $8 billion collectively.

Madison Funds mentioned Carlisle Companies Incorporated in its Q4 2022 investor letter. Here is what the firm has to say:

“The bottom five detractors for the quarter were Carlisle Companies Incorporated (NYSE:CSL), Brown & Brown, Brookfield, CarMax, and Armstrong World Industries. Following robust outperformance during the first three quarters of the year, Carlisle shares took a step back this quarter as investors worried about commercial roofing demand in a potentially slowing economy.”

11. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 43

Dividend Yield as of April 21: 5.25%

International Business Machines Corporation (NYSE:IBM) is a New York-based multinational tech company. It currently pays a quarterly dividend of $1.65 per share and has a dividend yield of 5.25%, as recorded on April 21. The company has been rewarding shareholders with growing dividends for the past 27 years, which makes it one of the best dividend stocks on our list.

In April, BMO Capital maintained a Market Perform rating on the shares, with a $145 price target, highlighting the company’s recent quarterly earnings. In the first quarter of 2023, the company reported revenue of $14.3 billion, which showed a 0.7% growth from the same period last year.

At the end of Q4 2022, 43 hedge funds tracked by Insider Monkey reported owning stakes in International Business Machines Corporation, compared with 40 in the previous quarter. These stakes have a collective value of $1.23 billion.

Diamond Hill Capital mentioned International Business Machines Corporation in its Q4 2022 investor letter. Here is what the firm has to say:

“New positions initiated in Q4 included shorts International Business Machines Corporation (NYSE:IBM), Acushnet Holdings (GOLF) and elf Beauty (ELF). Since diversified information technology company IBM’s 2019 acquisition of Red Hat, the company has aggressively pursued a hybrid cloud strategy. Though IBM and its new management team have made solid progress on this pivot, we believe the company still meaningfully lags the cloud hyperscalers and other cloud-native companies. Management has also laid out aggressive long-term targets for revenue growth and free cash flow, both of which we believe the company will struggle to achieve as it faces intense competition in its hybrid cloud business and structural headwinds in the company’s legacy businesses.”

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

Number of Hedge Fund Holders: 45

Dividend Yield as of April 21: 8.18%

Altria Group, Inc. (NYSE:MO) is an American company that manufactures tobacco, cigarettes, and related products. In April, Stifel resumed its coverage on the stock with a Buy rating and a $52 price target, highlighting the company’s earnings growth and investments in smoke-free developments.

On March 1, Altria Group, Inc. declared a quarterly dividend of $0.94 per share, which was in line with its previous dividend. The company holds a 53-year streak of consistent dividend growth, which makes it one of the best dividend stocks on our list.

As of the close 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.”

9. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 48

Dividend Yield as of April 21: 2.67%

An American retail corporation, Target Corporation (NYSE:TGT) is next on our list of the best dividend stocks. The company offers a quarterly dividend of $1.08 per share and has a dividend yield of 2.67%, as of April 21. It has been growing its dividends consistently for the past 51 years.

In the fourth quarter of 2022, Target Corporation reported revenue of $31.4 billion, which was up 1.3% from the same period last year. During the quarter, the company returned $497 million to shareholders in dividends, up from $432 million during the prior-year period.

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 Investments mentioned Target Corporation in its Q1 2023 investor letter. Here is what the firm has to say:

“Target Corporation (NYSE:TGT) reported a solid fourth quarter, exceeding expectations. Same store sales were positive with better-than-expected margins resulting in earnings for the quarter ahead of expectations. At the same time, Target provided guidance for 2023 that was below expectations, which sets them up to meet or exceed expectations after a difficult 2022. Target expects same store sales for 2023 to range from a low single digit decline to a low single digit increase, with operating margins in the 4.5% to 5% range. We continue to view Target as well positioned for long-term growth with its strong owned brand strategy and omnichannel offerings.”

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

Number of Hedge Fund Holders: 49

Dividend Yield as of April 21: 2.33%

Automatic Data Processing, Inc. (NASDAQ:ADP) is a New Jersey-based management services company. In its fiscal Q2 2023 earnings, the company posted an operating cash flow of over $1.6 billion, which showed growth from $1.2 billion during the same period last year. Its revenue for the quarter came in at $4.4 billion, which was up by 9.08% from the prior-year period.

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 offers a quarterly dividend of $1.25 per share for a dividend yield of 2.33%, as recorded on April 21.

Automatic Data Processing, Inc. 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.

Madison Investments mentioned Automatic Data Processing, Inc. in its Q1 2023 investor letter. Here is what the firm has to say:

“We eliminated Automatic Data Processing, Inc. (NASDAQ:ADP) from the portfolio due to concerns that the economy is close to a peak job market and interest income on the company’s float has also peaked along with interest rates. The company’s valuation does not reflect the potential downside in the job market from a weakening economy.”

7. 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 52

Dividend Yield as of April 21: 5.73%

3M Company (NYSE:MMM) is a Minnesota-based multinational conglomerate that operates in the fields of industry, healthcare, and consumer goods. In the fourth quarter of 2022, the company reported revenue of $8.1 billion, which beat estimates by $10 million. Its cash position remained strong as its operating cash flow came in at $1.9 billion and it generated $1.7 billion in free cash flow.

3M Company has been raising its dividends consistently for the past 65 years. The company offers a quarterly dividend of $1.50 per share and has a dividend yield of 5.73%, as of April 21. During Q4, it returned $1.4 billion to shareholders via share repurchases and dividends, which makes it one of the best dividend stocks on our list.

Of the 973 hedge funds tracked by Insider Monkey in Q4 2022, 52 funds owned stakes in 3M Company, up from 49 in the previous quarter. The collective value of these stakes is over $1.57 billion. AQR Capital Management was one of the company’s leading stakeholders in Q4.

6. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 56

Dividend Yield as of April 21: 6.99%

Verizon Communications Inc. (NYSE:VZ) ranks sixth on our list of the best dividend stocks. BofA appreciated the company’s core business and solid dividend payments and maintained a Neutral rating on the stock in March with a $41 price target.

Verizon Communications Inc., one of the best dividend stocks, currently pays a quarterly dividend of $0.6525 per share. The company has rewarded shareholders with increased dividends continuously for 16 years in a row. The stock’s dividend yield on April 21 came in at 6.99%. McDonald’s Corporation, Hormel Foods Corporation, and Roper Technologies, Inc. are some other best dividend stocks to consider.

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.”

5. Medtronic plc (NYSE:MDT)

Number of Hedge Fund Holders: 58
Dividend Yield as of April 21: 3.17%

Medtronic plc (NYSE:MDT) is an American medical device company, based in Minnesota. On March 2, the company declared a quarterly dividend of $0.68 per share, which was in line with its previous dividend. The stock’s dividend yield came in at 3.17%, as of April 21. It is one of the best dividend stocks on our list as it has raised its dividends consistently for the past 45 years.

In its fiscal Q3 2023, Medtronic plc (NYSE:MDT) reported revenue of $7.7 billion, which was consistent with its revenue reported during the same period last year. At the end of January 2023, it had roughly $3.8 billion in operating cash flow and its free cash flow came in at roughly $2.5 billion.

As of the end of Q4 2022, Medtronic plc (NYSE:MDT) was a part of 58 hedge fund portfolios, up from 55 in the previous quarter, according to Insider Monkey’s data. The collective value of these stakes is over $2.6 billion.

Carillon Tower Advisers mentioned Medtronic plc (NYSE:MDT) in its Q4 2022 investor letter. Here is what the firm has to say:

“Medtronic plc (NYSE:MDT) announced disappointing clinical trial results for a new product in its pipeline and lowered its fiscal 2023 financial guidance due to lingering supply chain issues and slower than expected medical procedure recovery.”

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

Number of Hedge Fund Holders: 58
Dividend Yield as of April 21: 2.87%

The Coca-Cola Company (NYSE:KO) is next on our list of the best dividend stocks to buy and hold. In April, Barclays raised its price target on the stock to $72 with an Overweight rating on the shares, expecting the company to show volume growth in its upcoming quarter.

The Coca-Cola Company has been raising its dividends consistently for the past 61 years. It currently pays a quarterly dividend of $0.46 per share and has a dividend yield of 2.87%, as of April 21.

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%).”

3. The Sherwin-Williams Company (NYSE:SHW)

Number of Hedge Fund Holders: 64
Dividend Yield as of April 21: 1.04%

The Sherwin-Williams Company (NYSE:SHW) is an American paint and coating manufacturing company, based in Ohio. It currently pays a quarterly dividend of $0.605 per share for a dividend yield of 1.04%, as of April 21. The company holds a 44-year track record of consistent dividend growth, which makes it one of the best dividend stocks on our list.

In April, Mizuho raised its price target on The Sherwin-Williams Company to $263 and maintained a Buy rating on the shares, ahead of the company’s Q1 earnings.

As per Insider Monkey’s Q4 2022 database, 64 hedge funds reported having stakes in The Sherwin-Williams Company, up from 63 in the previous quarter. These stakes have a total value of over $2.44 billion.

ClearBridge Investments mentioned The Sherwin-Williams Company in its Q4 2022 investor letter. Here is what the firm has to say:

“A third approach to return generation is purchasing idiosyncratic businesses that largely control their own destiny. We saw mixed results from this group in the fourth quarter, with paint and coatings maker The Sherwin-Williams Company (NYSE:SHW) benefiting from significant pricing power that will allow it to grow earnings handsomely with only modest revenue increases.”

2. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 70
Dividend Yield as of April 21: 2.48%

PepsiCo, Inc. (NASDAQ:PEP) is a New York-based food company that also deals in the manufacturing of other beverages. JPMorgan called the stock a favored name for investors ahead of its Q1 earnings. The firm raised its price target on the stock to $196 in April with an Overweight rating on the shares.

PepsiCo, Inc. is a Dividend King with 50 consecutive years of dividend growth, which makes it one of the best dividend stocks on our list. The company currently pays a quarterly dividend of $1.15 per share and has a dividend yield of 2.48%, as of April 21.

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)

1. Exxon Mobil Corporation (NYSE:XOM)

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This article is originally published at Insider Monkey.