In this article, we will take a look at the 5 Best Dividend Stocks to Invest In According to Hedge Funds. For a deeper discussion and analysis, please refer to the 12 Best Dividend Stocks to Invest In According to Hedge Funds.
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5. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 83
Dividend Yield as of May 21: 2.19%
The Cigna Group (NYSE:CI) is a global health company that provides insurance and related products and services. It operates through two segments: Evernorth Health Services and Cigna Healthcare.
On May 20, Deutsche Bank analyst George Hill downgraded The Cigna Group (NYSE:CI) from ‘Buy’ to ‘Hold’, while also slightly trimming its price target from $303 to $302. The lowered target still indicates an upside of almost 7% from the current price level. According to the analyst, Cigna is faced with a “multi-year uncertainty” as it works through changes to part of its insurance portfolio and pharmacy benefit manager model.
The downgrade comes despite The Cigna Group (NYSE:CI) beating estimates in its Q1 results last month. The company grew its adjusted profits by around 16% YoY to $7.79 per share, while its revenue of $68.5 billion was also up by 4.7% compared to last year. Moreover, the health firm raised its full-year 2026 consolidated adjusted EPS outlook to at least $30.35, up from the prior guidance of $30.25 and slightly better than the consensus of $30.33.
The Cigna Group (NYSE:CI) was also recently included in our list of the 10 Best Fortune 500 Stocks to Buy According to Analysts.
4. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 88
Dividend Yield as of May 21: 2.84%
America’s leading health solutions company, CVS Health Corporation (NYSE:CVS), provides advanced health care from pharmacy services and health plans to health and wellness.
On May 20, Mizuho bumped up its price target on CVS Health Corporation (NYSE:CVS) from $102 to $110, while maintaining an ‘Outperform’ rating on the shares. The target boost represents an upside of over 17% from the current share price.
Mizuho believes that the managed care group delivered strong results in the recent Q1 earnings season. The firm boosted its target on CVS due to the lower risk of negative medical loss ratio changes through the end of this year.
Similarly, earlier on May 8, Wells Fargo also raised its price target on CVS Health Corporation (NYSE:CVS) by $1 and kept an ‘Overweight’ rating on the shares (read more details here).
The positive analyst attention comes after CVS delivered better-than-expected results for its Q1 on May 6. Moreover, the company raised its full-year 2026 profit guidance to a range of $7.30 to $7.50 per share, up from its forecast of $7 to $7.20. CVS now expects its full-year total revenues to be at least $405 billion, while its cash flow from operations is projected to be at least $9.5 billion.
3. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 98
Dividend Yield as of May 21: 2.97%
The Home Depot, Inc. (NYSE:HD) is the largest home improvement specialty retailer in the world, engaging in the sale of building materials and home improvement products. The company operates over 2,300 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, Canada, and Mexico.
On May 20, Morgan Stanley trimmed its price target on The Home Depot, Inc. (NYSE:HD) from $420 to $400, while maintaining an ‘Overweight’ rating on the shares. The revised target, which still indicates an upside potential of over 27% from the current levels, comes after the firm “slightly’ reduced its EPS estimates for FY26 and FY27 following the recent Q1 results, in addition to reiterating its guidance for the ongoing year.
Similarly, on the same day, Wells Fargo lowered its price target on The Home Depot, Inc. (NYSE:HD) from $375 to $360, but kept its ‘Overweight’ rating on the shares. According to the analyst, HD’s recent Q1 report was mostly in line, “albeit April weather dampened the exit rate.” Wells believes that Home Depot’s management offered reason for optimism by reaffirming the company’s FY 2026 guidance, despite the current macroeconomic concerns regarding interest rates, oil prices, etc.
The move comes despite The Home Depot, Inc. (NYSE:HD) beating estimates in its Q1 report on May 19. The company reaffirmed its guidance of total sales growth of approximately 2.5% to 4.5% for FY 2026. Meanwhile, its adjusted EPS growth is expected to range from flat to up 4% from the $14.69 delivered last year.
2. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 131
Dividend Yield as of May 21: 2%
JPMorgan Chase & Co. (NYSE:JPM) is one of the oldest, largest, and best-known financial institutions in the world. The company serves millions of customers, clients, and communities in over 100 global markets.
On May 19, JPMorgan Chase & Co. (NYSE:JPM) declared a quarterly dividend of $1.50 per share. The dividend is payable on July 31 to shareholders of record at the close of business on July 6, 2026. JPM boasts a rich dividend history, having increased its payouts for 14 consecutive years. The stock currently has an annual dividend yield of 2% and was recently included in our list of the 10 Best “Dogs of the Dow” Stocks to Buy for the Rest of 2026.
JPMorgan Chase & Co. (NYSE:JPM) reported better-than-expected results for its Q1 2026 last month. The company grew its revenue by 10% YoY to $50.54 billion, while net income rose 13% to $16.49 billion. However, the company lowered its guidance for full-year 2026 net interest income, a key driver of bank earnings, from the previous $104.5 billion to about $103 billion.
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 145
Dividend Yield as of May 21: 2.31%
Topping our list of the Best Dividend Stocks is UnitedHealth Group Incorporated (NYSE:UNH). It is a health care and well-being company with team members in two distinct and complementary businesses – its insurance wing, UnitedHealthcare, and its health services segment, Optum.
On May 20, Mizuho boosted the firm’s price target on UnitedHealth Group Incorporated (NYSE:UNH) from $410 to $440, while maintaining an ‘Outperform’ rating on the shares. The revised target represents an upside of 15% from the current share price. According to Mizuho, the managed care group delivered strong results in the recent Q1 earnings season. The firm bumped up its estimate on UNH due to the lower risk of negative medical loss ratio changes through the end of this year.
UnitedHealth Group Incorporated (NYSE:UNH) comfortably exceeded estimates in its Q1 results reported last month. The company kept costs in check and received improved government payments for its health insurance services. Moreover, it raised its full-year 2026 adjusted earnings outlook to more than $18.25 per share, compared to its prior forecast of more than $17.75.
Eagle Capital Management, an investment management company, stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2026 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) and Humana, two of the leading providers of managed care, have significant scale advantages in a consolidated industry that outgrows the overall economy. The two companies have struggled over the past few years as Medicare Advantage went through a downcycle of cost/price squeeze. We believe conditions have bottomed and that we are transitioning to a multi-year improvement in margins and returns. Actions by each to reduce costs and implement AI through their businesses are incremental tailwinds. At our weighted position, we expect annual EPS growth exceeding 20%.”
While we acknowledge the potential of UNH 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 UNH and that has 100x upside potential, check out our report about the cheapest AI stock.
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