Investors in the market for large-cap dividend-paying companies that nonetheless have huge growth potential need look no further than the following five stocks, which are heavily weighted in the WisdomTree US Quality Dividend Gr ETF (NASDAQ:DGRW) as well as beloved by hedge funds.
WisdomTree Investments, Inc. (NASDAQ:WETF) is one of the leading providers of specialized ETFs in the world, with a focus on actively managed, fundamentally-weighted indexes. One of the asset management company’s most intriguing ETFs for dividend investors is the WisdomTree US Quality Dividend Gr ETF (NASDAQ:DGRW). This ETF uses the WisdomTree U.S. Dividend Index as its starting point, which contains nearly 1,400 dividend-paying companies which have a market cap of at least $2 billion.
The ETF narrows that down to 280 mostly large-cap stocks (about 95%) which are judged to offer the best combination of stability and growth potential. Most of those stocks ranked among the 20 Dividend Stocks That Billionaires Are Piling On, an indication that the wealthiest and most successful investors in the world also see huge growth potential in them. The ETF has thus far delivered on its promise, with average annual market price returns of 12.36% through the end of November.
While the WisdomTree US Quality Dividend Gr ETF (NASDAQ:DGRW) contains a large collection of dividend stocks, which collectively yield 2.48%, it is heavily weighted towards a few dozen companies, with its top 10 holdings alone accounting for just under 35% of its portfolio. From among those top 10 holdings, we’ve gathered the five that are the most heavily owned among the hedge funds tracked by our database and then ordered them based on their combined rankings, providing a powerful consensus on which dividend stocks are must-buys. You can check out the rankings below and on the following pages.
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5. Intel Corporation (NASDAQ:INTC)
– Ranking Among Hedge Funds (as of September 30): 56th (58 hedge fund shareholders)
– Ranking in the WisdomTree US Quality Dividend Gr ETF (as of December 14): 8th (2.33% weighting)
– Forward Dividend Yield: 2.51%
First up is Intel Corporation (NASDAQ:INTC), which was owned by 58 hedge funds on September 30 to rank as the 56th most popular stock among them. It was also given 2.33% weighting within the WisdomTree US Quality Dividend Gr ETF, the third-largest given to a tech company, which was the sector with the highest weighting (21.60%) in the portfolio. Intel has raised its dividend payments for four straight years, growing them by 30% during that time. However, its yield has fallen by a full percentage point since early 2016 due to the stock gaining 50% during that time.