Five Dividend Stocks to Follow Hedge Funds Into

Our list of dividend-paying stocks that hedge funds like starts with McDonald’s Corporation (NYSE:MCD), in which there were 62 funds holding shares heading into 2018, up by two funds over the quarter and higher than 55 funds that disclosed stakes as of the end of 2016. McDonald’s Corporation (NYSE:MCD)’s stock has a dividend yield of 2.55% and the company is currently paying a dividend of $1.01 per quarter. McDonald’s has been consisently growing its dividend for decades, which earned it a place among Dividend Aristocrats, a group of S&P 500 stocks with over 25 consecutive years of dividend increases.

McDonald’s Corporation (NYSE:MCD)’s business model that includes over 80% of restaurants owned and operated by franchisees ensures it with a stable cash flow and the company plans to increase the proportion of franchised locations to 95%, which suggest that it’s most likely that McDonald’s Corporation (NYSE:MCD) will continue increasing its dividend. Moreover, McDonald’s Corporation is a good recession-proof investment and should perform better than the broader market in case of a correction, alongside some of these stocks.

Even though during the fourth quarter, the number of funds from our database long Bristol-Myers Squibb Co (NYSE:BMY) declined by four to 66, the stock saw an increase in popularity during 2017, as there were 58 funds with stakes in the company a year earlier. In December, Bristol-Myers Squibb Co (NYSE:BMY) declared a dividend of $0.40 per share for the first quarter, up from the previous $0.39. The company’s stock sports a yield of 2.35%. What’s also important to point out is that Bristol-Myers Squibb Co (NYSE:BMY) has been paying dividends for almost three decades and it increased its dividend during the financial crisis.

For the last quarter, Bristol-Myers Squibb Co (NYSE:BMY) posted EPS of $0.68 and revenue of $5.45 billion, both slightly above the consensus estimates. Moreover, the company provided its 2018 guidance, which includes revenue growth in the low- to mid-single digits.

General Electric Company (NYSE:GE) might be a slightly controversial choice since there weren’t many positive news regarding the company in the last year and its stock lost 45% during 2017. However, many analysts consider that General Electric Company (NYSE:GE)’s stock is close to bottoming out. Hedge funds also believe that General Electric Company’s (NYSE:GE)’s stock is a bargain. During the fourth quarter, the number of funds bullish on General Electric jumped by 18 to 68, while during 2017, that number went up by 14 funds. In fact, the stock saw one of the largest increases in popularity during the last three months of 2017.

As General Electric Company (NYSE:GE)’s stock has been facing many financial issues, the company halved its dividend last year, but with the stock price also falling, its dividend yield currently stands at around 3.40%. The company’s new CEO John Flannery is currently working on turning the industrial conglomerate around, which involves a lot of work from portfolio restructuring and selling assets, to cutting costs, improving margins and turning around the power segment. 2018 will be an important year for General Electric, as the company takes steps in improving its situation and investors will watch closely if the turnaround is actually possible, but hedge funds seem to be betting on that.

Broadcom Ltd (NASDAQ:AVGO) and QUALCOMM, Inc. (NASDAQ:QCOM) both saw a substantial increase in popularity among hedge funds during the fourth quarter in connection with Broadcom Ltd (NASDAQ:AVGO)’s bid to acquire QUALCOMM, Inc. (NASDAQ:QCOM) last November. However, earlier this week, President Donald Trump signed an executive order banning the merger on national security concerns. Nevertheless, both chipmakers are good investments even without their merger. Broadcom Ltd (NASDAQ:AVGO) still has plans to move back to the US and is likely to explore other acquisitions. QUALCOMM, Inc. (NASDAQ:QCOM) has its own growth plans and is currently trying to acquire NXP Semiconductors NV (NASDAQ:NXPI), having recently raised the offer to $127.50 per share from $110.

At the end of 2017, there were 70 funds long QUALCOMM, Inc. (NASDAQ:QCOM), up from 41 funds a quarter earlier and from 63 funds at the end of 2016. In Broadcom Ltd (NASDAQ:AVGO), the number of bullish investors went up by nine over the quarter and by 10 over the year to 83 funds that disclosed stakes in the last round of 13F filings. QUALCOMM, Inc. (NASDAQ:QCOM) and Broadcom Ltd (NASDAQ:AVGO) have dividend yields of 3.79% and 2.69%, respectively, although in dollar terms, Broadcom’s dividend of $1.75 per share is higher than Qualcomm’s $0.57.

Disclosure: none