David Einhorn’s Three Favorite Dividend Stocks

#1 Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders (as of June 30): 144
Total Value of Hedge Fund Holdings (as of June 30): $21.27 billion
Hedge Fund Holdings as Percent of Float (as of June 30): 2.90%

Apple Inc. (NASDAQ:AAPL) may not seem like a dividend stock, but it pays $0.52 per share every quarter, good for a 1.83% dividend yield. The company has either maintained or raised its dividend every quarter since the middle of 2012.

Although shares fell by 11.7% in the third quarter, Apple Inc. (NASDAQ:AAPL)’s dividend is safe, as the company Steve Jobs founded is the leading smartphone company in the world, with a world-class brand and workforce, along with a strong ecosystem of software producers that produce for Apple’s iPhone first, and everything else later. There are some growth opportunities, as the company is rumored to be working on a smart-car product that could come onto the market as early as 2020. Virtual reality, the connected healthcare home, and artificial intelligence are other potential markets.

Because its brand has so much cachet, Apple dominates the most important category of all: smartphone profit share. Apple made $39.51 billion in profits in 2014 and will earn even more in 2015 and 2016. Apple’s big profits and the hundreds of billions of dollars on its balance sheet offer the potential for it to increase its dividend even further this year. At a forward P/E of 11.6, the stock looks cheap.

Many hedge funds own Apple Inc. (NASDAQ:AAPL). Within our extensive database of around 730 hedge funds, Apple is the second-most popular stock, with 144 funds owning $21.27 billion of the company’s shares as of the end of June. Carl Icahn‘s Icahn Capital LP owns 52.76 million shares, which represents around 21% of his equity portfolio, while Einhorn’s Greenlight owns 7.38 million shares, which represents 11.61% of his portfolio.

Disclosure: None