The recent market sell-off left many large investors concerned and led them to move to less risky investments or forced them to keep more cash. However, among thousands of publicly-traded companies, there are a few stocks that are still attractive due to their strong fundamentals and their management’s commitment to return capital to shareholders. While the drop in oil prices raised concerns regarding oil & gas companies’ ability to maintain dividend payments, other sectors are more solid bets for dividend investors. For this article, we have compiled a list of stocks that ranked as the most popular among the funds we track and sport a considerable dividend yield.
Insider Monkey’s database contains more than 700 hedge funds and other institutional investors that registered a strong performance over the years and whose equity portfolios we analyze every quarter to determine which stocks they are bullish on. This approach allows us to benefit from the expertise and stock-picking skills of these investors and helps us determine stocks that can substantially outperform the market (see more details here).
Without any further ado, let’s start with Microsoft Corporation (NASDAQ:MSFT), which is the most popular dividend stock among the funds we track and one of the five most popular companies among the investors we track (see full list here). Microsoft Corporation (NASDAQ:MSFT)’s stock has advanced by more than 19% over the last 52 weeks and it currently spots a dividend yield of 2.59%. This is not the highest dividend yield out there, but Microsoft is also one of the largest tech companies and its stock is currently trading at a beta of 0.92, which makes it less volatile than the broader market, an important factor in the current environment. Overall, a total of 140 funds from our database own shares of Microsoft Corporation (NASDAQ:MSFT) as of the end of December, versus 113 funds a quarter earlier. Among them, Jeff Ubben‘s ValueAct Capital owns some 56.62 million shares of Microsoft, while Stephen Mandel’s Lone Pine Capital holds 27.26 million shares.
Next in line is Pfizer Inc. (NYSE:PFE), in which a total of 109 funds from our database reported long positions in the latest round of 13F filings, up from 97 investors a quarter earlier. Pfizer pays a dividend of $0.30 per share, which gives its stock a yield of 4.07% amid a 14.30% drop registered in the last year. In this way, Pfizer’s stock currently sports one of the highest dividend yields among large-cap healthcare companies and its forward P/E of 12.00 is lower than the average of the S&P 500. In this way, aside from buying Pfizer Inc. (NYSE:PFE) on the back of its upcoming merger with Allergan, the stock also represents a good dividend investment. Among the funds we track, billionaire Ken Fisher‘s Fisher Asset Management reported holding 32.33 million shares of Pfizer Inc. (NYSE:PFE) as of the end of 2015.
On the next page, we are going to discuss the other three dividend stocks that the investors from our database like.