5 Blue Chip Dividend Stocks Hedge Funds are Buying

4. Verizon Communications (NYSE: VZ)

Communication services company Verizon Communications (NYSE: VZ) is also considered the safest stock for dividend investors and it was in 65 hedge fund portfolios at the end of the September quarter. Verizon has increased its dividend every year over the past 14 years. It currently offers a quarterly dividend of $0.63 per share. The company returned almost $5.1 billion in cash dividend payments in the first half of 2020.

Its dividends are safe because financial numbers are offering complete cover to dividend payments. Its payout ratio based on income stands around 50%, meaning the company is returning only 50% of income to investors in the form of dividends. Here is what Mott Capital said about Verizon in a recent investor letter:

“Verizon (VZ) rose by 1.7% in the fourth quarter and by 9.2% for the year. Verizon is another company that should benefit as wireless subscribers upgrade their data plans from 4G to 5G. Additionally, the roll-out of 5G and the technology changes that it is likely to usher in will make having wireless data connections in the future more important than today. Again, Verizon appears to be a critical player in 5G and will continue to hold a place in the portfolio.”