In this article, we discuss the best high dividend stocks to buy now.
Global dividends soared 14.7% on an underlying basis last year, reaching a new high of $1.47 trillion, following the COVID-19 cutbacks in 2020. According to the recently published Janus Henderson Global Dividend Index report, the most rapid dividend growth was seen in Europe and the UK with an underlying growth rate of 25.7% and 21.2%, respectively.
The 33rd edition of Janus Henderson’s report also mentioned that the mining and banking sectors contributed the most to the overall dividend record growth. The surge in cyclical commodity prices, which rewarded mining corporations with record profitability in 2021, boosted dividend growth in the mining sector. Dividend-paying miners contributed more than a quarter of the $212 billion annual increase in global dividend payouts in 2021, or $96.6 billion. Similarly, corporations resuming payouts that had been postponed in 2020 contributed a quarter of the increase. The banking industry accounted for the majority of the growth, with dividends increasing by 40%, or $50.5 billion.
According to Janus Henderson, global dividends will reach a new high of $1.52 trillion in full-year 2022, representing a 5.7% increase in underlying growth. Investors and market analysts are encouraged by the gradual recovery of dividend-paying corporations, as seen by their earnings reports. Among the world’s biggest dividend payers are BHP Group Limited (NYSE:BHP), Exxon Mobil Corporation (NYSE:XOM), and Kinder Morgan, Inc. (NYSE:KMI), among others discussed in detail below.
Our Methodology
We searched for high-yielding dividend stocks in mining, healthcare, real estate, energy, and financial sectors. We ranked each stock based on the dividend yield it provides. In addition, each company’s business fundamentals and analyst ratings are mentioned to provide further context.
We included hedge fund sentiment on each high-yielding dividend stock using Insider Monkey’s Q4 2021 data.
Best High Dividend Stocks to Buy Now
10. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Dividend yield as of March 2: 4.14%
Number of Hedge Fund Holders: 42
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a retail pharmacy behemoth with a 46-year dividend increase streak. The pharmaceutical dividend aristocrat has a five-year dividend growth rate of 5.05% and a current yield of 4.13%.
The Illinois-based pharmaceutical retailer is kicking off a strong first quarter in fiscal 2022, with revenue exceeding expectations by $947 million and totaling $33.9 billion. During the quarter, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) administered 15.6 million COVID-19 booster shots, which helped drive greater traffic to its outlets. Moreover, the company’s digital revenue grew 88% in Q1 fiscal 2022, with customers placing 3.6 million same-day pickup orders during the three-month period.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA), like BHP Group Limited (NYSE:BHP), Exxon Mobil Corporation (NYSE:XOM), and Kinder Morgan, Inc. (NYSE:KMI), is a high dividend stock that is a good investment option for income investors. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) attracted more hedge funds in the fourth quarter of 2021. 42 out of 924 elite funds held stakes in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) at the end of December 2021, up from 37 in Q3. Camber Capital Management is the biggest shareholder of the company, owning 3.5 million shares valued at $183 million.
Miller Howard Investments, in its Q3 2021 investor letter, mentioned Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and discussed its stance on the firm. Here is what the fund said:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We took a position in Walgreens (WBA) based on its low valuation, high dividend yield, and stable business model.”
9. Exxon Mobil Corporation (NYSE:XOM)
Dividend yield as of March 2: 4.37%
Number of Hedge Fund Holders: 71
With a current dividend yield of 4.52%, Exxon Mobil Corporation (NYSE:XOM) is one of the best high dividend stocks followed by income investors. The Texas-based oil firm attracts more investors not only because it is the world’s second-largest oil company, but also because its dividend payout has increased for the past 38 years, making the oil major a dividend aristocrat.
Exxon Mobil Corporation (NYSE:XOM) has yet to issue a statement regarding its plans for its 30% stake in the Sakhalin Island joint venture, an enormous offshore crude development in Russia’s Far East. As of March 1, Exxon Mobil Corporation (NYSE:XOM) is up 40% in the past six months.
As of the end of December 2021, 71 of the 924 elite funds tracked by Insider Monkey had a $5.39 billion stake in Exxon Mobil Corporation (NYSE:XOM). In Q4 2021, GQG Partners had the largest stake in Exxon Mobil Corporation (NYSE:XOM), with over 32 million shares worth $1.98 billion.
Here is what Goehring & Rozencwajg Associates has to say about Exxon Mobil Corporation in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon Mobil Corporation (NYSE:XOM) was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects.
According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
8. Realty Income Corporation (NYSE:O)
Dividend yield as of March 2: 4.48%
Number of Hedge Fund Holders: 30
One of the best high dividend stocks investors are watching is the real estate investment trust Realty Income Corporation (NYSE:O). The California-based REIT offers a dividend yield of 4.39% and pays its shareholders a monthly dividend. Realty Income Corporation’s (NYSE:O) consistent dividend growth ranks it alongside BHP Group Limited (NYSE:BHP), Exxon Mobil Corporation (NYSE:XOM), and Kinder Morgan, Inc. (NYSE:KMI) as one of the best high dividend stocks to invest in.
Realty Income Corporation (NYSE:O) released its fourth-quarter earnings on February 22. The company’s Q4 revenue of $685 million was up 65% year over year. The company invested $6.41 billion in 911 properties and properties under development or expansion in 2021, with $2.57 billion in Europe. As of February 28, shares of Realty Income Corporation (NYSE:O) increased 13% in the past year.
Mizuho analyst Vikram Malhotra maintained a Buy rating on Realty Income Corporation (NYSE:O) with a price target of $76 on January 20. Similarly, hedge funds increased their stake in the REIT company at the end of December 2021 with 30 funds out of the 924 tracked by Insider Monkey owning shares in the company, up from 22 in the previous quarter.
7. GlaxoSmithKline plc (NYSE:GSK)
Dividend yield as of March 2: 5.25%
Number of Hedge Fund Holders: 25
GlaxoSmithKline plc (NYSE:GSK) is one of the world’s major drug manufacturers headquartered in the UK. The pharmaceutical behemoth is an attractive investment option for a number of reasons, one of which is its high dividend yield of 5.25%. Investors like GlaxoSmithKline plc (NYSE:GSK) because of the strength of its core biopharma business. The company offers a wide range of pharmaceuticals and vaccines in various therapeutic areas. Recently, GlaxoSmithKline plc (NYSE:GSK) supplied the adjuvant used in the world’s first plant-based COVID-19 vaccine developed by Canadian biopharmaceutical company Medicago.
Ken Fisher’s Fisher Asset Management is the drugmaker’s largest stakeholder, owning 18.2 million shares of GlaxoSmithKline plc (NYSE:GSK) worth $803 million. The Washington-based money management firm increased its position in the healthcare company by 3% in Q4 2021. Overall, 36 funds of the 924 elite funds tracked by Insider Monkey reported owning stakes in GlaxoSmithKline plc (NYSE:GSK) at the end of December 2021.
6. Medical Properties Trust, Inc. (NYSE:MPW)
Dividend yield as of March 2: 5.72%
Number of Hedge Fund Holders: 20
Healthcare-focused REIT Medical Properties Trust, Inc. (NYSE:MPW) also offers a high dividend yield of 5.58%. The Alabama-based REIT recently hiked its quarterly dividend by 3.6% to $0.29 per share. Medical Properties Trust, Inc. (NYSE:MPW) has increased its dividend to shareholders consistently in the last nine years.
Medical Properties Trust, Inc. (NYSE:MPW) acquires and develops net-leased hospital facilities, owning nearly 440 hospitals spread across nine countries. Currently, the REIT manages a total portfolio worth $22.3 billion. The company’s revenue in the third quarter of 2021 totaled $409.3 million, a 23% increase year on year, and exceeded revenue estimates by $5.61 million.
On February 14, global investment bank Credit Suisse maintained its Outperform rating on Medical Properties Trust, Inc. (NYSE:MPW), with a $26 price target. Hedge funds are drawn to the healthcare REIT because of its diverse portfolio. At the end of the fourth quarter of 2021, 20 funds had stakes in Medical Properties Trust, Inc. (NYSE:MPW), up from 18 at the end of the third quarter. Investment firm Cardinal Capital is the leading shareholder of the Alabama-based REIT, owning over 5.3 million shares worth $128 million.
5. ONEOK, Inc. (NYSE:OKE)
Dividend yield as of March 2: 5.86%
Number of Hedge Fund Holders: 25
ONEOK, Inc. (NYSE:OKE) is one of the high-yielding dividend stocks in the midstream industry being watched by income investors because it has increased dividends consistently for the past 19 years and has an 8.74% five-year dividend growth rate.
The Oklahoma-based NGL processor reported its full-year 2021 earnings on February 28. Net income came in at $1.5 billion. In addition, ONEOK, Inc. (NYSE:OKE) ended the year with a total debt reduction of more than $600 million. As of the end of February, shares of ONEOK, Inc. (NYSE:OKE) jumped 41% in the previous year.
25 elite funds held stakes in ONEOK, Inc. (NYSE:OKE) at the end of the fourth quarter of 2021, up from 18 the previous quarter. Adage Capital Management, led by Phill Gross and Robert Atchinson, owns the most shares in ONEOK, Inc. (NYSE:OKE), with a total holding of $27.9 million.
Miller Howard Investments, in its Q3 2021 investor letter, mentioned ONEOK, Inc. (NYSE:OKE) and discussed its stance on the firm. Here is what the fund said:
” In late August, we increased the portfolio’s cyclical exposure by trimming utilities after a period of relative outperformance and reallocating the capital to midstream energy, which had pulled back over the summer. We added ONEOK Inc. (OKE) with the expectation that it will benefit from increasing natural gas and natural gas liquids (NGL) recovery in the Bakken region.”
4. Kinder Morgan, Inc. (NYSE:KMI)
Dividend yield as of March 2: 6.21%
Number of Hedge Fund Holders: 39
Kinder Morgan, Inc. (NYSE:KMI) has a dividend yield of 6.33%, making it one of the highest-yielding oil midstream companies. In the last five years, the Houston-based energy infrastructure company has increased its dividend by an average of 16.65%. In 2022, Kinder Morgan, Inc. (NYSE:KMI) is guiding to distribute an annual dividend of $1.11 per share, a 3% increase from the 2021 declared dividends.
In January, Barclays analyst Theresa Chen raised her price target on Kinder Morgan, Inc. (NYSE:KMI) to $19 from $18, maintaining her Equal Weight rating on the stock. Chen mentioned that she has a “generally positive outlook for the group in 2022”.
Kinder Morgan, Inc. (NYSE:KMI) is one of the largest energy transportation and storage companies in the United States, operating 143 terminals and 83,000 miles of pipeline across North America. According to Insider Monkey’s Q4 13F filings, 39 hedge funds held stakes in Kinder Morgan, Inc. (NYSE:KMI) at the end of December 2021, for a total stake value of $999 million, compared to 43 funds in Q3 2021, for a total stake value of $1.01 billion.
3. AllianceBernstein Holding L.P. (NYSE:AB)
Dividend yield as of March 2: 8.70%
Number of Hedge Fund Holders: 5
Another high dividend stock from the financial sector followed by market analysts and hedge funds is investment management firm AllianceBernstein Holding L.P. (NYSE:AB). The New York-based investment manager pays its shareholders an annual dividend of $3.90 per share. In the last five years, AllianceBernstein Holding L.P. (NYSE:AB) has increased its dividend at an average rate of 15.23%.
AllianceBernstein Holding L.P. (NYSE:AB) had $751 billion in assets under management as of January 2022. In addition, the company provides its clients with business research and trading services, which contributed $452 million to total revenue in 2021. During the fourth quarter of 2021, 5 hedge funds had a total investment of $32.4 million in AllianceBernstein Holding L.P. (NYSE:AB), according to Insider Monkey’s 13F filings.
AllianceBernstein Holding L.P. (NYSE:AB) is likewise favored by market analysts. Citi analyst William Katz boosted his price objective for the financial stock to $64.50 from $62 in January. Katz maintained his Buy rating on the stock.
2. BHP Group Limited (NYSE:BHP)
Dividend yield as of March 2: 10.22%
Number of Hedge Fund Holders: 21
Australian miner BHP Group Limited (NYSE:BHP), the largest mining company in the world, currently pays its shareholders an annual dividend of $7 per share. As the Melbourne-based mining company announced its fiscal 2022 Q2 results in February, BHP Group Limited (NYSE:BHP) also stated that it will pay a record interim dividend of US$1.50 per share or US$7.6 billion. As of March 2, the stock gained 5.64% in the previous month.
Boston-based investment firm Arrowstreet Capital is one of the biggest stakeholders of BHP Group Limited (NYSE:BHP). According to Insider Monkey’s 13F filings, Arrowstreet increased its stake in the Australian miner by 101% during the fourth quarter of 2021. Overall, 21 funds of the 924 elite funds tracked by Insider Monkey reported owning stakes in the BHP Group Limited (NYSE:BHP) at the end of December 2021.
Meanwhile, Berenberg analyst Richard Hatch maintained his Hold rating on BHP Group Limited (NYSE:BHP) and increased his price target for the stock to 2,300 GBp from 2,200 GBp.
1. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Dividend yield as of March 2: 26.79%
Number of Hedge Fund Holders: 20
Dry bulk cargo shipper Star Bulk Carriers Corp. (NASDAQ:SBLK) offers one of the highest dividend yields in the market. The Greek shipping company recently upped its quarterly dividend by 60% to $2 per share, which will be paid on March 15 to shareholders who were on the books on March 2.
Star Bulk Carriers Corp. (NASDAQ:SBLK) shares rose 6.6% following strong fourth-quarter results, in which the company announced that the average time charter equivalent (TCE) rate it was able to charge on its ships last year reached $37,406 per day, per vessel, helping the shipper in achieving “record-high profitability” in 2021. Additionally, Star Bulk Carriers Corp. (NASDAQ:SBLK) grew its cash to $473.3 million at the end of Q4 2021, up from $371.7 million at the beginning of the quarter.
Star Bulk Carriers Corp. (NASDAQ:SBLK) boasts a fleet of 128 vessels ranging from 52,000 to 210,000 DWT, making the company the largest dry bulk operator in the US and Europe. Given the Greek shipper’s strong financial position and market dominance, hedge funds have become bullish on Star Bulk Carriers Corp. (NASDAQ:SBLK). At the end of the fourth quarter, there were 20 elite funds with a $733 million stake in the high-yielding shipping company.
Here is what Massif Capital has to say about Star Bulk Carriers Corp. in its Q3 2021 investor letter:
“We initiated one long position, one short position and exited one position during the third quarter. Our new long position was in Star Bulk Carriers (SBLK), a pure-play dry bulk operator with roughly 120 controlled vessels and 14 million tons of combined cargo capacity globally.
SBLK has one of the better management teams in the maritime shipping industry and the lowest cost structure among all dry bulk names. After announcing their new dividend policy in May, SBLK now has one of the best payout structures in shipping. The firm has paid out $0.3 and $0.7 per share in dividends for the first and second quarters of 2021. SBLK will most likely announce a dividend for the third quarter somewhere in the $1.15-$1.25 per share range, depending on movement in net working capital.
We believe the best way to look at this business is through cash generation potential and how much is returned to investors. The current equity valuation does not reflect current rates for shipping (earnings), partly because of the velocity of the move in rates and because shipping cycles turn, and it’s not clear whether this is a local top of the early innings of a multi-year cycle. Our belief is the latter. Part of our catalyst is the market re-rating the stock higher once the length of the increased earnings power becomes understood. It is a relatively strong catalyst in the sense that with a strong dividend policy, we can be patient for the market to underwrite this story as the cash is either returned to us via a high dividend yield if the market is either slow or chooses not to join our side of the trade.
Our estimates suggest a time-charter equivalent rate (net profit or loss of operating a vessel daily) of at least $30,000 for SBLK in Q4, with the firm earning a potential annual average of $26,000. Our base case is that this is a strong floor going into next year, with little need to articulate much more upside. If rates hold, which we expect them to do, we could see a 20+% annual dividend year next year for SBLK. If the market priced the equity such that the dividend yield was 8%, that implies a $62 stock. Today our base case target for the firm is $37 per share. This is likely conservative as we know that third-quarter rates are higher than the second quarter, and third-quarter dividends will most likely reflect that. We are cautious about diving too deep into the sensitivities to the upside with this position as we are arriving at some pretty remunerative torque using current contracted values and seemingly conservative forecasts…” (Click here to see the full text)
You can also take a peek at the 10 Dividend Stocks With Over 5% Yield and 10 Companies Under Investors’ Radar After Releasing their Earnings Reports.
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Disclosure. None. 10 Best High Dividend Stocks to Buy Now is originally published on Insider Monkey.
