In this article, we discuss 5 Dow Jones dividend stocks with over 1% yield. If you want to read our detailed analysis of dividend investment and past performance of dividend stocks as well as the risk/reward and methodology of this list, go directly to read 10 Dow Jones Dividend Stocks With Over 1% Yield.
5. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 67
Dividend Yield as of September 18: 1.36%
American Express Company (NYSE:AXP) is a New York-based company that specializes in payment card services. In July, RBC Capital raised its price target on the stock to $180 with a Sector Perform rating on the shares, as the company’s underlying billings activity remained strong and above pre-pandemic levels.
In Q2 2022, American Express Company (NYSE:AXP) reported revenue of $13.4 billion, presenting a 30.9% year-over-year growth. The company also reported record card spending driven by robust travel and entertainment rebound after the pandemic. Its operating cash flow for the quarter came in at $4.2 billion, up from $3.8 billion in the previous quarter. The company’s free cash flow also grew to $3.8 billion, from $3.4 billion in the previous quarter.
American Express Company (NYSE:AXP) has been making uninterrupted dividend payments for the past 30 years, coming through as one of the most prominent Dow Jones dividend stocks. It currently pays a quarterly dividend of $0.52 per share, with a dividend yield of 1.36%, as of September 18.
At the end of June 2022, 67 hedge funds in Insider Monkey’s database owned stakes in American Express Company (NYSE:AXP), compared with 69 in the preceding quarter. These stakes hold a total value of over $25.2 billion. With a position worth more than $21 billion, Berkshire Hathaway was the company’s leading stakeholder in Q2.
4. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 71
Dividend Yield as of September 18: 2.64%
Up next on our list of Dow Jones dividend stocks is The Procter & Gamble Company (NYSE:PG), which is an American multinational consumer goods corporation. The company has been raising its dividends consistently since its incorporation in 1890. It also maintains a 66-year streak of dividend growth. The company pays a quarterly dividend of $0.9133 per share and has a yield of 2.64%, as of September 18.
In fiscal Q4 2022, The Procter & Gamble Company (NYSE:PG) reported revenue of $19.52 billion, which showed a 3% growth from the same period last year. The company’s operating cash flow for the year came in at $16.7 billion and its free cash flow productivity stood at 93%. In addition to this, it returned $19 billion of its capital to shareholders during the year, of which dividend payments represented $8.8 billion.
In August, Barclays reiterated its Overweight rating on The Procter & Gamble Company (NYSE:PG) due to the company’s strong quarterly and annual earnings.
As per Insider Monkey’s Q2 2022 database, 71 hedge funds owned stakes in The Procter & Gamble Company (NYSE:PG), compared with 72 in the previous quarter. These stakes hold a collective value of over $5.5 billion.
3. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 72
Dividend Yield as of September 18: 1.17%
NIKE, Inc. (NYSE:NKE) is an Oregon-based multinational company that specializes in the design and production of footwear, apparel, and related accessories. In Q2 2022, the company remained popular among elite funds, as 72 hedge funds in Insider Monkey’s database owned stakes in it, compared with 67 in the previous quarter. These stakes have a consolidated value of over $3.3 billion.
In fiscal Q4 2022, NIKE, Inc. (NYSE:NKE) reported a strong cash position with $13 billion in cash and equivalents and other short-term investments. The company’s operating cash flow stood at over $1.15 billion and its free cash flow came in at $909 million. It returned $481 million in dividends during the quarter, up 11% from the prior year. In addition to this, the company also repurchased its shares worth $1.1 billion.
On August 4, NIKE, Inc. (NYSE:NKE) declared a quarterly dividend of $0.305 per share, consistent with its previous dividend. The company has been raising its dividends consistently for the past 20 years. As of September 18, this Dow Jones dividend stock has a yield of 1.17%.
In September, UBS lifted its price target on NIKE, Inc. (NYSE:NKE) to $156 and maintained its Buy rating on the shares. The firm appreciated the management’s conviction around its Consumer Direct Acceleration strategy, which is a positive step for the company’s revenue.
ClearBridge Investments mentioned NIKE, Inc. (NYSE:NKE) in its Q4 2021 investor letter. Here is what the firm has to say:
“Nike is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold direct. Nike is also still underindexed to the women’s category, which we see as a significant ongoing catalyst.”
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 91
Dividend Yield as of September 18: 1.27%
UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational managed healthcare and insurance company that offers healthcare products and insurance services to consumers. The company reported strong quarterly earnings in Q2, posting revenue of $80.3 billion, up 13% from the same period last year. Its operating cash flow came in at $6.9 billion, compared with $5.3 billion in the previous quarter. Its free cash flow also grew to $6.2 billion, from $4.7 billion in the preceding quarter. The company returned $4 billion to shareholders through dividends and share repurchases.
UnitedHealth Group Incorporated (NYSE:UNH) started paying annual dividends in 1990 and shifted to quarterly dividends in 2010. Since then, the company has raised its payouts every year. It currently pays a quarterly dividend of $1.65 per share and has a yield of 1.27%, as recorded on September 18.
In September, Deutsche Bank raised its price target on UnitedHealth Group Incorporated (NYSE:UNH) to $569 and maintained its Buy rating on the shares. The firm highlighted the company’s partnership with Walmart, which would help it improve its revenue.
GQG Partners owned $1.6 billion worth of stakes in UnitedHealth Group Incorporated (NYSE:UNH), becoming the company’s leading stakeholder in Q2 2022. Overall, 91 hedge funds owned stakes in the company in Q2, with a total value of roughly $11 billion.
Baron Funds mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2022 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated is a leading diversified health and wellbeing company whose divisions include insurance arm, United Healthcare and health care services arm, Optum, which offers care delivery and other services. Shares increased 1.1% on strong first quarter results (revenues were up 14% year-over-year), and the company increased its annual guidance.
The performance was driven by Optum as a result of a growing adoption of value-based solutions. We believe UnitedHealth leads the health care industry in innovation and execution as evidenced by its strong value proposition leading to Medicare Advantage share gains, strong cost controls, and its leadership position in the shift to value-based care.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Dividend Yield as of September 18: 1.01%
Microsoft Corporation (NASDAQ:MSFT) is one of the most stable tech companies that pay dividends to shareholders. On September 20, the company declared a 10% hike in its quarterly dividend to $0.68 per share. This was the company’s 16th consecutive year of dividend growth. As of September 18, the stock has a yield of 1.01%.
Microsoft Corporation (NASDAQ:MSFT) generated revenue of $51.8 billion in fiscal Q4 2022, which showed a 12.4% year-over-year growth. The company’s operating cash flow stood at over $24.6 billion while its free cash flow came in at $17.7 billion. During the quarter, it paid $12.4 billion to shareholders and dividend payments amounted to over $4.6 billion.
In July, BMO Capital lifted its price target on Microsoft Corporation (NASDAQ:MSFT) to $320 with an Outperform rating on the shares. The firm mentioned that though its results were not up to the mark, the management affirms double-digit constant currency growth and strong booking for the next fiscal year.
At the end of Q2 2022, 258 hedge funds owned positions in Microsoft Corporation (NASDAQ:MSFT), compared with 259 in the previous quarter. The stakes owned by these hedge funds hold a collective value of over $56 billion.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q2 2022 investor letter. Here is what the firm has to say:
“Shares of Microsoft Corporation, a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues.
As discussed above, we continue to believe Microsoft remains a durable and growing business as companies across all industries look to digitally transform, taking advantage of the continuously expanding solution set Microsoft has to offer.”
You can also take a look at10 Best Blue Chip Dividend Stocks to Invest In and 10 Best Stocks That Pay Monthly Dividends
