10 Best Affordable Dividend Stocks to Buy According to Hedge Funds

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1. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 123

Forward P/E Ratio as of February 26: 14.01

An American multinational financial services company, JPMorgan Chase & Co. (NYSE:JPM) offers services in commercial banking, financial transaction processing, and asset management. In FY24, the company posted record earnings, with annual profits rising 18% year-over-year to $58.5 billion. This growth was largely fueled by its investment banking and trading divisions, which capitalized on a market recovery in the fourth quarter. However, net interest income (NII) declined 3% year-over-year in Q4 2024 to $23.5 billion, marking its first drop since 2021.

JPMorgan Chase & Co. (NYSE:JPM) has maintained a strong reputation as a top dividend stock, consistently paying dividends since 1972. In the most recent quarter, it reinforced its commitment to shareholder returns by distributing $3.5 billion in dividends. The company currently offers a quarterly dividend of $1.25 per share, with a yield of 1.93% as of February 26.

JPMorgan Chase & Co. (NYSE:JPM) has accumulated significant excess capital, equivalent to roughly 10% of its market capitalization while maintaining a disciplined approach to capital allocation. Although share buybacks are a lower priority, it repurchased $6.36 billion worth of stock in Q3 2024. As economic conditions improve, the company is expected to ease its cash reserves and return more capital to shareholders over time.

Overall, JPMorgan Chase & Co. (NYSE:JPM) ranks first on our list of the best affordable dividend stocks. While we acknowledge the potential for JPM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

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