In this article, we discuss the 12 best long-term dividend stocks to buy now.
Inflation pressures because of an increase in demand for goods and supply chain pressures have hammered growth stocks at the stock market in the past few weeks, giving value plays their day in the sun as investors scramble to shield their portfolio from risks. One data point that underlines the urgency of the situation is the performance of the dividend-heavy Dow Jones Industrial Average against the benchmark S&P 500. Since the latter peaked in early September, the former has outperformed it.
Investors who are considering bets on dividend plays should also be encouraged by a recent Goldman Sachs study in which the investment bank projected that the S&P 500 will increase dividend payouts by about 6% through 2022. Although 2020 was not a good year for dividend stocks, with many firms slashing or halting their payouts, the economic recovery since the COVID-19 vaccinations began has once again ignited interest in value plays. Even hedge funds are jumping on this bandwagon.
Some of the best long-term dividend stocks to buy now include Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO), among others discussed in detail below. During the coronavirus crisis, at least 57 famous companies were forced to decrease or suspend dividend payouts, according to a study by Goldman Sachs. So far this year, more than 22 of these firms have resumed the payouts, attesting to the pace of the recovery.
Photo by Nathan Dumlao on Unsplash
Our Methodology
With this context in mind, here is our list of the 12 best long-term dividend stocks to buy now. Only those firms that have consecutively increased their dividends for ten years or more were selected for the list. The forward dividend yield and consecutive years of dividend growth are mentioned alongside each stock for further clarity.
The list is compiled according to the number of hedge funds having stakes in each company. Data from the 873 funds tracked by Insider Monkey was used for this purpose.
Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Long-Term Dividend Stocks To Buy Now
12. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 24
Consecutive Years of Dividend Growth: 55
Forward Dividend Yield: 2.37%
Hormel Foods Corporation (NYSE:HRL) is a Minnesota-based firm that produces and markets meat products. It is placed twelfth on our list of 12 best long-term dividend stocks to buy now.
On September 3, investment advisory Barclays reiterated an Equal Weight rating on Hormel Foods Corporation (NYSE:HRL) stock but lowered the price target to $46 from $48. Benjamin Theurer, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $562 million in Hormel Foods Corporation (NYSE:HRL), down from 26 the preceding quarter worth $483 million.
In its Q4 2020 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and Hormel Foods Corporation (NYSE:HRL) was one of them. Here is what the fund said:
“We had a quiet fourth quarter, making just one swap within our consumer staples sector. We sold our position in Hormel (tkr: HRL). Hormel has seen tailwinds from the pandemic, as the maker of Spam and Skippy peanut butter has experienced higher demand from nervous consumers seeking out products with longer shelf lives. The stock had risen 18% year-to-date and its price-to-earnings (P/E) ratio had expanded from 25x to over 31x. Hormel pays a 2% dividend which is lower than many of its peers in the consumer staples sector. Furthermore, Hormel’s Jennie-O Turkey brand has experienced disruption in recent years as raw material over- or undersupply has caused large swings in revenue that lead to unpredictability. We decided to seek out better opportunities within the sector, particularly looking for a more attractively valued company that pays a higher dividend and sells everyday products that people will buy even in times of economic distress.”
11. Dover Corporation (NYSE:DOV)
Number of Hedge Fund Holders: 29
Consecutive Years of Dividend Growth: 65
Forward Dividend Yield: 1.26%
Dover Corporation (NYSE:DOV) is an Illinois-based firm that provides machinery and other support services to various industries worldwide. It is ranked eleventh on our list of 12 best long-term dividend stocks to buy now.
On July 21, investment advisory Barclays maintained an Overweight rating on Dover Corporation (NYSE:DOV) stock and raised the price target to $185 from $165, noting the firm was “inexpensive amidst a sector where valuations are out of hand”.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Dover Corporation (NYSE:DOV) with 1.1 million shares worth more than $166 million.
10. Genuine Parts Company (NYSE:GPC)
Number of Hedge Fund Holders: 29
Consecutive Years of Dividend Growth: 65
Forward Dividend Yield: 2.64%
Genuine Parts Company (NYSE:GPC) is placed tenth on our list of 12 best long-term dividend stocks to buy now. The company distributes automotive and industrial parts. It is headquartered in Georgia.
On September 16, investment advisory Evercore ISI added Genuine Parts Company (NYSE:GPC) stock to a Tactical Outperform List of the firm with a price target of $135, underlining that the pricing in the auto and industrial sectors was increasing.
At the end of the second quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $418 million in Genuine Parts Company (NYSE:GPC), up from 26 in the preceding quarter worth $357 million.
Just like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO), Genuine Parts Company (NYSE:GPC) is one of the stocks to buy and hold for the long term.
9. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 42
Consecutive Years of Dividend Growth: 63
Forward Dividend Yield: 3.33%
3M Company (NYSE:MMM) is ranked ninth on our list of 12 best long-term dividend stocks to buy now. The firm operates as an industrial conglomerate and is headquartered in Minnesota.
On July 27, 3M Company (NYSE:MMM) posted earnings for the second quarter, reporting earnings per share of $2.59, beating estimates by $0.31. The revenue over the period was close to $9 billion, up 24% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in 3M Company (NYSE:MMM) with 5.3 million shares worth more than $1 billion.
Along with Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO), 3M Company (NYSE:MMM) is one of the stocks that elite value investors are buying.
8. Stanley Black & Decker, Inc. (NYSE:SWK)
Number of Hedge Fund Holders: 44
Consecutive Years of Dividend Growth: 53
Forward Dividend Yield: 1.79%
Stanley Black & Decker, Inc. (NYSE:SWK) is a Connecticut-based firm with interests in the tools, storage, industrial, and security businesses. It is placed eighth on our list of 12 best long-term dividend stocks to buy now.
On June 17, investment advisory Gabelli upgraded Stanley Black & Decker, Inc. (NYSE:SWK) stock to Buy from Hold, noting the growth of the firm in the ecommerce sector. Justin Bergner, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Management is a leading shareholder in Stanley Black & Decker, Inc. (NYSE:SWK) with 1 million shares worth more than $211 million.
In addition to Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO), Stanley Black & Decker, Inc. (NYSE:SWK) is one of the stocks attracting the attention of institutional investors.
7. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 45
Consecutive Years of Dividend Growth: 64
Forward Dividend Yield: 2.12%
Emerson Electric Co. (NYSE:EMR) is a Missouri-based firm that makes and sells electrical components and equipment. It is ranked seventh on our list of 12 best long-term dividend stocks to buy now.
On August 5, investment advisory Credit Suisse reiterated an Outperform rating on Emerson Electric Co. (NYSE:EMR) stock and raised the price target to $108 from $103, appreciating the earnings beat of the firm in the third fiscal quarter.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm Millennium Management is a leading shareholder in Emerson Electric Co. (NYSE:EMR) with 1.8 million shares worth more than $174 million.
Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO) are some of the stocks that are mainstays in elite portfolios, just like Emerson Electric Co. (NYSE:EMR).
6. Illinois Tool Works Inc. (NYSE:ITW)
Number of Hedge Fund Holders: 45
Consecutive Years of Dividend Growth: 50
Forward Dividend Yield: 2.30%
Illinois Tool Works Inc. (NYSE:ITW) is placed sixth on our list of 12 best long-term dividend stocks to buy now. The firm makes and sells industrial products. It is headquartered in Illinois.
On August 2, investment advisory Citi maintained a Neutral rating on Illinois Tool Works Inc. (NYSE:ITW) stock and raised the price target to $256 from $252, noting the firm was benefiting from a solid recovery across most markets.
At the end of the second quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $657 million in Illinois Tool Works Inc. (NYSE:ITW), up from 33 the preceding quarter worth $411 million.
Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO) are among the top dividend stocks to buy now, in addition to Illinois Tool Works Inc. (NYSE:ITW).
5. Becton, Dickinson and Company (NYSE:BDX)
Number of Hedge Fund Holders: 52
Consecutive Years of Dividend Growth: 49
Forward Dividend Yield: 1.37%
Becton, Dickinson and Company (NYSE:BDX) is ranked fifth on our list of 12 best long-term dividend stocks to buy now. The firm operates in the healthcare equipment sector and is based in New Jersey.
Becton, Dickinson and Company (NYSE:BDX) reported earnings for the third fiscal quarter on August 5, posting earnings per share of $2.74, beating estimates by $0.30. The revenue over the period was $4.8 billion, up 26% year-on-year.
At the end of the second quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $3.3 billion in Becton, Dickinson and Company (NYSE:BDX), down from 65 the preceding quarter worth $3.7 billion.
In its Q2 2021 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and Becton, Dickinson and Company (NYSE:BDX) was one of them. Here is what the fund said:
“Becton, Dickinson and Company (“BD”) is one of the world’s largest medical supply, devices, laboratory equipment, and diagnostic products manufacturers. We like BD because it is a leader in the medical and life science industries with a durable mid-single digit growth profile and attractive returns on capital. They generate about 85% of revenue from consumables and 15% from equipment, and each year, they manufacture billions of needles, syringes, catheters, tubes, and medical devices which results in significant economies of scale that can be matched by few competitors. Their Life Sciences segment produces products that provide diversity in the steadily growing diagnostic testing and life sciences research fields.
Regarding the short-term issues, it’s been a challenging past 18 months for the company. In February 2020, they announced the FDA required an updated 510(k) clearance for their Alaris infusion pump. As a result, BD had to suspend selling new pumps until the updated regulatory filing received FDA clearance. In addition to the regulatory headwind, BD’s business was negatively impacted by the COVID-19 pandemic as individuals postponed doctor office visits and hospitals deferred non-emergency medical procedures. We believe these postponements are just now normalizing. Lastly, while BD’s Life Sciences business swiftly brought COVID-19 tests to market, there is uncertainty over the magnitude and duration of these revenues.
We believe these..”[read the entire letter here]
4. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 58
Consecutive Years of Dividend Growth: 57
Forward Dividend Yield: 2.42%
Colgate-Palmolive Company (NYSE:CL) is a New York-based firm that makes and sells consumer products. It is placed fourth on our list of 12 best long-term dividend stocks to buy now.
On October 5, investment advisory Bank of America reinstated coverage of Colgate-Palmolive Company (NYSE:CL) stock with a Neutral rating and a price target of $80, noting the innovations of the firm in the pet foods and oral care departments.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm First Eagle Investment Management is a leading shareholder in Colgate-Palmolive Company (NYSE:CL) with 11.8 million shares worth more than $963 million.
Here is what First Eagle Investment Management has to say about Colgate-Palmolive Company (NYSE:CL) in its Q1 2021 investor letter:
“The leading detractors in the quarter (included) Colgate-Palmolive Company. After a strong 2020 fueled in part by lockdown-driven demand, consumer staples stocks generally cooled during the first quarter as investors shifted attention to the more economically sensitive areas of the market likely to benefit from re-openings and improved discretionary spending. The effects of this rotation could be seen in the share price underperformance of names like Colgate-Palmolive.”
3. The Coca-Cola Company (NYSE:KO)
Number of hedge fund holders: 62
Consecutive Years of Dividend Growth: 59
Forward Dividend Yield: 3.17%
The Coca-Cola Company (NYSE:KO) is a Georgia-based beverage company. It is ranked third on our list of 12 best long-term dividend stocks to buy now.
On July 22, investment advisory Truist maintained a Buy rating on The Coca-Cola Company (NYSE:KO) stock and raised the price target to $65 from $60, underlining that the firm remained a part of the reopening trade and had long-term profitability.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based firm Berkshire Hathaway is a leading shareholder in The Coca-Cola Company (NYSE:KO) with 400 million shares worth more than $21 billion.
2. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 68
Consecutive Years of Dividend Growth: 64
Forward Dividend Yield: 2.50%
The Procter & Gamble Company (NYSE:PG) is placed second on our list of 12 best long-term dividend stocks to buy now. The firm makes and sells consumer packaged goods. It is headquartered in Ohio.
On October 5, investment advisory Bank of America reinstated coverage of The Procter & Gamble Company (NYSE:PG) stock with a Buy rating and a price target of $160, noting that bigger brands were adapting to a dynamic market.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Cedar Rock Capital is a leading shareholder in The Procter & Gamble Company (NYSE:PG) with 7.5 million shares worth more than $1 billion.
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Consecutive Years of Dividend Growth: 59
Forward Dividend Yield: 2.66%
Johnson & Johnson (NYSE:JNJ) is ranked first on our list of 12 best long-term dividend stocks to buy now. The firm markets healthcare products and is based in New Jersey.
In earnings results for the second quarter, posted on July 21, Johnson & Johnson (NYSE:JNJ) reported earnings per share of $2.48, beating market estimates by $0.19. The revenue over the period was $23 billion, up 27% year-on-year and beating predictions by $770 million.
At the end of the second quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $7 billion in Johnson & Johnson (NYSE:JNJ), up from 81 in the previous quarter worth $6.9 billion.
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Disclosure. None. 12 Best Long-Term Dividend Stocks To Buy Now is originally published on Insider Monkey.
