In this article, we discuss 5 best Fortune 500 dividend stocks to buy now. If you want to read about some more Fortune 500 dividend stocks, go directly to 12 Best Fortune 500 Dividend Stocks to Buy Now.
5. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 55
Dividend Yield as of October 18: 7.25%
AT&T Inc. (NYSE:T) provides telecommunications, media, and technology services worldwide. It is one of the best large cap stocks to invest in. On October 10, the chief technology officer of AT&T said that the firm is converging wired and wireless tech in municipalities across the country and it is also in the process of deploying its 5G standalone core.
On August 18, MoffettNathanson analyst Craig Moffett maintained a Market Perform rating on AT&T Inc. (NYSE:T) stock and lowered the firm’s price target to $17 from $19, noting that the company has accelerated its subscriber growth in the past few months.
At the end of the second quarter of 2022, 55 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in AT&T Inc. (NYSE:T), compared to 74 in the preceding quarter worth $4 billion.
In its Q2 2022 investor letter, Argosy Investors, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:
“I purchased shares of AT&T Inc. (NYSE:T) prior to its spin-off of Warner Brothers Discovery (WBD). Most people are probably familiar with AT&T. They are a major cellular service provider, and until recently owner of the Time Warner media assets, which include HBO, CNN, TNT, TBS, Cartoon Network, DC Comics and the Batman content brands, and more. At the time of my purchase, I estimated that the combined T/WBD assets traded at a 15% levered FCF yield, or 6x FCF. I also believe that WBD, which now has HBO Max, has future growth in front of it which was previously in doubt when Discovery was primarily tied to the declining cable television bundle. Since then, Netflix reported disappointing subscriber growth, which threw all streaming companies into disarray. WBD followed that news with a disappointing outlook on its business during its own quarterly earnings.
As a result, shares of WBD have declined nearly 40% since the spin-off. WBD now trades for 7x 2023E FCF and there is great potential for returns over the next few years as WBD pays down debt used to finance its merger combining Warner Brothers and Discovery and grows. We do not own a large position in WBD at present, but we may add to it over time.”
4. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 56
Dividend Yield as of October 18: 5.94%
Philip Morris International Inc. (NYSE:PM) operates as a tobacco company working to deliver a smoke-free future and evolving portfolio for the long-term to include products outside of the tobacco and nicotine sector. It is one of the top large cap stocks to invest in. On October 4, Philip Morris said that it was due to be granted unconditional antitrust approval by the European Union for its takeover of Swedish Match, a manufacturer in the product segments of cigars and lights.
On July 19, Jefferies analyst Owen Bennett maintained a Hold rating on Philip Morris International Inc. (NYSE:PM) stock and lowered the price target to $99 from $107, noting that the company’s Q2 results came in ahead of its prior guidance.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Philip Morris International Inc. (NYSE:PM), with 30 million shares worth more than $3 billion.
In its Q2 2022 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Philip Morris International Inc. (NYSE:PM) was one of them. Here is what the fund said:
“On the positive side of the ledger, our top contributor was Swedish Match, a Swedish tobacco and nicotine products maker. The company received an all-cash takeover offer from rival Philip Morris International Inc. (NYSE:PM), which we also held in the portfolio, for SEK 106 per share—a 35% premium to Swedish Match’s prior closing share price. The deal is a good fit for PM as it reduces PM’s dependence on cigarettes—a category in steady decline—and accelerates the company’s transition to smokeless “reduced-risk” products (RRPs)—a category that has experienced rapid growth over the past five years. PM can also leverage its global scale to generate significant revenue synergies from these complementary product sets, as well as quickly gain access to the US market—the world’s largest market for RRPs and one where regulators have embraced RRPs and other less harmful nicotine products. We exited our position in Swedish Match as shares approached the takeout price.”
3. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 57
Dividend Yield as of October 18: 6.68%
Devon Energy Corporation (NYSE:DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids. It is one of the premier large cap stocks to invest in. On September 5, Devon Energy said that it has partnered up with export infrastructure development company, Delfin Midstream, for long term liquefied natural gas export. The agreement provides Devon up to 2 million tons per annum of total liquefaction capacity.
On September 21, Citi analyst Scott Gruber maintained a Buy rating on Devon Energy Corporation (NYSE:DVN) stock and raised the price target to $77 from $62, noting that the exploration and production companies have “bounced modestly, leading to material 2023 multiple expansion and yield compression”.
At the end of the second quarter of 2022, 57 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Devon Energy Corporation (NYSE:DVN), compared to 66 in the previous quarter worth $1.9 billion.
In its Q2 2022 investor letter, GoodHeaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund said:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
2. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 58
Dividend Yield as of October 18: 4.40%
Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical company that discovers, develops, and commercializes medicines. It is one of the major large cap stocks to invest in. On October 11, the US Food and Drug Administration granted priority review to Gilead Sciences’ application approval of Trodelvy to treat patients with a type of breast cancer.
Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrow Street Capital is a leading shareholder in Gilead Sciences, Inc. (NASDAQ:GILD), with 15.7 million shares worth more than $968 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Gilead Sciences, Inc. (NASDAQ:GILD) was one of them. Here is what the fund said:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
1. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 59
Dividend Yield as of October 18: 3.52%
Chevron Corporation (NYSE:CVX) engages in integrated energy and chemical operations worldwide. It is one of the elite large cap stocks to invest in. On October 5, news media reported that the Biden administration was preparing to remove sanctions on Venezuela which will allow Chevron to resume pumping oil in the country.
On September 12, Piper Sandler analyst Ryan Todd maintained an Overweight rating on Chevron Corporation (NYSE:CVX) stock and raised the price target to $190 from $189, noting that company’s near-record distillate margins continue to drive upside to refining estimates, despite some risk to upstream cost inflation.
At the end of the second quarter of 2022, 59 hedge funds in the database of Insider Monkey held stakes worth $26 billion in Chevron Corporation (NYSE:CVX), compared to 53 the preceding quarter worth $27.99 billion.
In its Q1 2022 investor letter, Diamond Hill, an asset management firm, highlighted a few stocks and Chevron Corporation (NYSE:CVX) was one of them. Here is what the fund said:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
You can also take a peek at 10 Best FTSE Dividend Stocks To Buy Now and 10 Best Italian Stocks To Buy Now.
