In this article, we discuss 10 best dividend stocks yielding at least 7% according to hedge funds.
Currently, the stock market is in an unpredictable phase, and experts hold varying opinions about the country’s economic outlook. According to a report by Forbes, the New York Fed’s indicator suggests a 66% likelihood of a U.S. recession within the next year. In addition to this, the Federal Reserve has repeatedly warned that its ongoing practice of interest rate increases will lead to a slowdown in economic growth. On the other hand, the University of Michigan reported that consumer confidence in the U.S. rose by 13% in July as compared to last year, reaching its highest point since 2021. This indicates that consumers are likely to continue spending actively.
Regardless of the situation, experts always advise investors to prepare for potential challenges by creating portfolios that can withstand unfavorable economic situations. Including dividend stocks in a portfolio can be a strategy to navigate negative market sentiment. In the past, these equities have often performed better than other types of stocks during economic downturns. In addition to this, these companies have sound financial health and improved cash flow, allowing them to distribute dividends to their shareholders.
In Morningstar’s August report, David Harrell, an editorial director at the financial services firm, advises investors to examine a company’s past track record in various economic situations, particularly whether it managed to maintain dividend payments during economic downturns or industry-related challenges. Some of the best dividend stocks in this regard are The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), and Exxon Mobil Corporation (NYSE:XOM). These companies have a solid track record of increasing their dividends over time, which makes investors feel confident about them.
Also read: 10 Dividend Stocks with Over 8% Yield
Over the years, dividends have represented a significant portion of the market’s overall return. The MSCI Value Index, which tracks the performance of stocks that are considered undervalued or trading at lower prices relative to their fundamentals, returned 303% in the last 25 years, with dividends contributing 72% to the total return during this period. The index methodology considers factors like book value, price-to-earnings ratio, and dividend yield to select and weight the stocks within the index.
Dividend yields play a significant role when investing in dividend stocks because healthy yields can bring investors profits from their investments. Additionally, stocks with high dividends have typically done better than their peers over the years. In one of our articles, we reported that high-yield dividend stocks showed less volatility in their value over the past 15 years.
Our Methodology:
For this list, we scanned Insider Monkey’s database of 910 hedge funds as of Q2 2023 and picked dividend stocks that have yields above 7%, as of August 20. The stocks are ranked in ascending order of hedge fund investors having stakes in them.
10 Best Dividend Stocks Yielding at Least 7% According to Hedge Funds
10. CTO Realty Growth, Inc. (NYSE:CTO)
Number of Hedge Fund Holders: 16
Dividend Yield as of August 19: 7.69%
CTO Realty Growth, Inc. (NYSE:CTO) is a Florida-based real estate investment trust company that is primarily engaged in owning, managing, and developing commercial properties. In the second quarter of 2023, the company reported revenue of over $26 million, which showed a 24% growth from the same period last year. It ended the quarter with over $7.3 million in cash and cash equivalents and its total assets amounted to over $1 billion.
CTO Realty Growth, Inc., one of the best dividend stocks currently pays a quarterly dividend of $0.38 per share. As of August 20, the stock has a dividend yield of 7.69%. The stock can be added to dividend portfolios alongside The Coca-Cola Company, The Procter & Gamble Company, and Exxon Mobil Corporation, which have raised their dividends for decades.
At the end of Q2 2023, 16 hedge funds in Insider Monkey’s database reported having stakes in CTO Realty Growth, Inc., up from 15 in the previous quarter. The collective value of these stakes is over $33 million.
9. Medifast, Inc. (NYSE:MED)
Number of Hedge Fund Holders: 18
Dividend Yield as of August 19: 7.83%
Medifast, Inc. (NYSE:MED) is an American company that operates in the health and wellness industry, specializing in weight management and healthy living products. It offers a range of products and programs designed to help individuals lose weight and maintain a healthier lifestyle.
Medifast, Inc. currently pays a quarterly dividend of $1.65 per share, having raised it by 0.6% in March this year. Through this increase, the company took its dividend growth streak to eight years, which makes it one of the best dividend stocks on our list. The stock’s dividend yield on August 20 came in at 7.83%.
In the second quarter of 2023, Medifast, Inc. posted an EPS of $2.77, which beat analysts’ estimates by $1.33. The company’s revenue of $296 million also surpassed consensus by $25.99 million. Its cash and cash equivalents at the end of June 30 came in at $147.4 million, up from $87.7 million six months ago.
As of the close of Q2 2023, 18 hedge funds in Insider Monkey’s database reported having stakes in Medifast, Inc., worth over $80.4 million. Among these hedge funds, Citadel Investment Group was the company’s leading stakeholder in Q2.
8. NextEra Energy Partners, LP (NYSE:NEP)
Number of Hedge Fund Holders: 23
Dividend Yield as of August 19: 7.38%
NextEra Energy Partners, LP (NYSE:NEP) is an American renewable energy company that owns and operates renewable energy assets with the goal of generating stable and predictable cash flows to distribute to its investors.
On July 25, NextEra Energy Partners, LP declared a 1.4% hike in its quarterly dividend at $0.854 per share. The company is one of the best dividend stocks on our list as it has raised its dividends every quarter since 2015. The stock has a dividend yield of 7.38%, as of August 20.
According to Insider Monkey’s database of Q2 2023, 23 hedge funds owned stakes in NextEra Energy Partners, LP, valued collectively at over $285 million.
7. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 25
Dividend Yield as of August 19: 7.54%
Enterprise Products Partners L.P. (NYSE:EPD) is a midstream energy company that operates in the oil and gas industry. The company also has processing facilities that extract impurities from natural gas and separate NGLs from it.
Enterprise Products Partners L.P. reported a strong cash position in the second quarter of 2023. Its distributable cash flow for the quarter came in at $1.7 billion and its operating cash flow amounted to nearly $2 billion. The company posted a net income of $1.3 billion, or $0.57 per unit.
Enterprise Products Partners L.P. currently pays a quarterly dividend of $0.50 per share, having raised it by 2% in July this year. The company has been raising its dividends consistently for the past 24 years, which makes it one of the best dividend stocks on our list. The stock’s dividend yield on August 20 came in at 7.54%.
At the end of June 2023, 25 hedge funds tracked by Insider Monkey were bullish on Enterprise Products Partners L.P.. The stakes owned by these hedge funds have a collective value of over $272.7 million. With over 4.4 million shares, Fairholme (FAIRX) was the company’s leading stakeholder in Q2.
6. Lincoln National Corporation (NYSE:LNC)
Number of Hedge Fund Holders: 30
Dividend Yield as of August 19: 7.01%
Lincoln National Corporation (NYSE:LNC) is an American financial services company that provides various insurance and retirement-related products and services. The company also engages in retirement planning, wealth management, and investment advisory services, assisting clients in creating comprehensive financial strategies tailored to their unique circumstances.
On August 10, Lincoln National Corporation declared a quarterly dividend of $0.45 per share, which was in line with its previous dividend. The company has been making regular dividend payments to shareholders since 1989, which makes it one of the best dividend stocks on our list. The stock offers a dividend yield of 7.01%, as of August 20.
In addition to The Coca-Cola Company, The Procter & Gamble Company, and Exxon Mobil Corporation, Lincoln National Corporation is also a reliable dividend stock to consider.
The number of hedge funds in Insider Monkey’s database owning stakes in Lincoln National Corporation grew to 30 in Q2 2023, from 26 in the previous quarter. The consolidated value of these stakes is over $211.6 million. Among these hedge funds, D E Shaw owned the largest stake in the company, worth over $42 million.
5. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 34
Dividend Yield as of August 19: 7.23%
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a multinational pharmaceutical and retail company. It operates a chain of pharmacies and retail stores, providing prescription medications, over-the-counter drugs, health and beauty products, and other general merchandise.
Walgreens Boots Alliance, Inc. has a strong dividend history as it has paid uninterrupted dividends to shareholders for 89 years. It also maintains a 47-year streak of consistently raising its dividends. The company currently pays a quarterly dividend of $0.48 per share and has a dividend yield of 7.23%, as of August 20.
At the end of Q2 2023, 34 hedge funds in Insider Monkey’s database owned investments in Walgreens Boots Alliance, Inc., compared with 39 in the previous quarter. The collective value of these stakes is over $440.8 million.
4. Truist Financial Corporation (NYSE:TFC)
Number of Hedge Fund Holders: 42
Dividend Yield as of August 19: 7.23%
Truist Financial Corporation (NYSE:TFC) is an American bank holding company that provides a wide range of related services to its consumers. On July 25, the company declared a quarterly dividend of $0.52 per share, which was consistent with its previous dividend. It has raised its dividends consistently for the past eight years, making it one of the best dividend stocks on our list. The stock has a dividend yield of 7.23%, as recorded on August 20.
As of the close of Q2 2023, 42 elite funds owned stakes in Truist Financial Corporation, according to Insider Monkey’s database. The consolidated value of these stakes is over $910 million. With over 15 million shares, Diamond Hill Capital was the company’s largest stakeholder in Q2.
3. KeyCorp (NYSE:KEY)
Number of Hedge Fund Holders: 49
Dividend Yield as of August 19: 7.57%
KeyCorp (NYSE:KEY) is an Ohio-based regional bank that offers a wide range of services and products to retail, small businesses, corporate, and commercial clients. It is one of the best dividend stocks on our list as it maintains a 12-year streak of dividend growth. The company pays a quarterly dividend of $0.205 per share and has a dividend yield of 7.57%, as of August 20.
KeyCorp was a popular buy among elite funds in Q2 2023, as hedge fund positions in the company jumped to 49 during the quarter, from 34 in the previous quarter. The collective value of stakes owned by these funds is over $334.1 million.
2. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 53
Dividend Yield as of August 19: 7.87%
Verizon Communications Inc. (NYSE:VZ) is next on our list of the best dividend stocks to consider. The company currently pays a quarterly dividend of $0.6525 per share for a dividend yield of 7.87%, as of August 20. It has been raising its dividends for consecutive 16 years.
In the first half of 2023, Verizon Communications Inc.’s operating cash flow grew to $18 billion. Its free cash flow for the period came in at $8 billion.
Of the 910 hedge funds tracked by Insider Monkey, 53 elite funds owned stakes in Verizon Communications Inc. at the end of Q2 2023. The collective value of stakes owned by these hedge funds is nearly $829 million.
The London Company mentioned Verizon Communications Inc. in its Q2 2023 investor letter. Here is what the firm has to say:
“Exited: Verizon Communications Inc. (NYSE:VZ) Sale reflects heightened competitive activity from both AT&T and T-Mobile. While VZ has the highest quality network, we are concerned that competitors’ focus on market share gains could continue to negatively affect VZ’s business.”
1. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 56
Dividend Yield as of August 19: 7.90%
AT&T Inc. is a prominent telecommunications and media conglomerate that operates across various sectors within the communications industry. On June 29, the company announced a quarterly dividend of $0.2775 per share, which was in line with its previous dividend. The stock’s dividend yield on August 20 came in at 7.90%. It tops our list of the best dividend stocks to consider.
At the end of Q2 2023, 56 hedge funds tracked by Insider Monkey owned investments in AT&T Inc., compared with 58 in the previous quarter. The overall value of these stakes is over $1.4 billion.
You can also take a look at Bill Gates Stock Portfolio: August 2023 Update and 10 Healthcare Stocks with Insider Buying
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This article is originally published at Insider Monkey.
