5 Best Dividend Stocks To Buy and Hold

In this article, we discuss 5 best dividend stocks to buy and hold. If you want to read our detailed analysis of dividend stocks and their performance over the years, go directly to read 15 Best Dividend Stocks To Buy and Hold.

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 (NYSE:KO) 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 (NYSE:KO). These stakes have a consolidated value of $28.8 billion.

Rowan Street Capital mentioned The Coca-Cola Company (NYSE:KO) 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 (NYSE:SHW) 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 (NYSE:SHW), 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 (NYSE:SHW) 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. (NASDAQ:PEP) 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. (NASDAQ:PEP), 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. (NASDAQ:PEP) 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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