10 Best Dividend Paying Stocks To Buy According to Quant Hedge Fund AQR

In this article, we will analyze the best dividend-paying stocks according to quant hedge fund AQR.

Only a handful of hedge funds have pursued unique investment strategies, and Cliff Asness’ Applied Quantitative Research, or AQR Capital, stands out among them. Known for its quantitative value strategies, Asness co-founded AQR in 1998 after working at Goldman Sachs. He and his partners developed the firm’s investment approach during their time in the University of Chicago’s Ph.D. program, emphasizing value and momentum strategies. These distinct approaches have delivered strong results for the fund over the years. In fact, AQR’s longest-running multistrategy fund returned 18.5% last year after fees, and had its best year in 2022, with a 43.5% gain. In January 2023, Asness forecasted that buying undervalued companies while shorting overvalued ones in particular sectors would be especially advantageous for that year.

Given the growing focus on generative AI and machine learning, Asness mentioned that his natural inclination is to be contrarian. However, he acknowledges that he needs to move past this instinct because he recognizes significant opportunities in machine learning. During a recent Bloomberg Invest conference, Asness highlighted that they increasingly rely on automated decision-making at AQR, expressing a belief that the machine might have a slight edge over human judgment. The firm’s improved performance in recent years is partly attributed to market cycles, but it has also implemented some changes.

Though Asness is now directing his focus toward artificial intelligence, diversification has always been a fundamental aspect of his investment strategy. He believes that concentrating investments into a single asset does not adequately address the inherent risks in financial markets. According to Asness, the rationale for preferring a diversified portfolio lies in its potential to provide a higher return for the risk taken, rather than simply offering a higher expected return.

When discussing diversification, different investment strategies can have varying advantages. Dividend investing is particularly popular among investors. In his paper published in the Financial Analysts Journal, which earned him the Graham and Dodd Award for the best paper of the year twice, Asness emphasized the value of dividends. He explained that companies that distribute higher dividends generally experience stronger earnings growth over the following decade compared to those that pay out less. Asness elaborated that substantial dividend payouts often indicate a company’s confidence in its future prospects, as firms are reluctant to cut dividends and typically wouldn’t pay them if they anticipated poor performance. Furthermore, companies paying large dividends must be more selective with their investment projects, potentially leading to wiser investment choices. On the other hand, companies that pay minimal dividends might be either struggling (as seen with inflated earnings in 1999) or engaging in “empire building,” where managers, having plenty of cash, may invest imprudently in less profitable ventures.

Asness’s preference for dividend stocks is also apparent in his Q2 2024 portfolio, which features a significant number of dividend-paying equities. With that in mind, we will take a look at some of the best dividend-paying stocks according to AQR Capital.

10 Best Dividend Paying Stocks To Buy According to Quant Hedge Fund AQR

Cliff Asness of AQR Capital Management

Our Methodology:

For this article, we analyzed AQR Capital Management’s 13f portfolio as of the second quarter of 2024 and selected the top dividend stocks that offered yields of at least 1% as of August 22. The stocks are ranked in ascending order of the fund’s stake in them during Q2 2024.

We also measured overall hedge fund sentiment around each stock according to Insider Monkey’s database of 912 funds as of Q2 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

10. Chubb Limited (NYSE:CB)

AQR Capital’s Stake Value: $296,412,873

Dividend Yield as of August 22: 1.34%

Chubb Limited (NYSE:CB) is an American Swiss insurance company, based in Zurich, Switzerland. The company offers a wide range of related products and services to its consumers. During the second quarter of 2024, AQR Capital increased its position in the company by 31%. The hedge fund owned over one million CB shares at the end of the quarter, worth over $296 million. The company made up 0.45% of the firm’s 13F portfolio.

Similar to dividend stocks, insurance companies typically don’t offer rapid, large-scale returns. However, they are dependable businesses that consistently grow over time due to their role in managing risk. Chubb Limited (NYSE:CB)’s approach centers on developing personalized customer relationships through a network of independent agents, providing coverage options that are often not easily available with other insurers. The stock has gained over 19% since the start of 2024 and its 12-month returns came in at over 36%.

Chubb Limited (NYSE:CB) is a strong dividend payer with stable cash generation. In the second quarter of 2024, the company reported an operating cash flow of $4.08 billion and its free cash flow amounted to $3.57 billion. This cash was enough to pay $369 million worth of dividends to shareholders during the quarter. The company’s overall revenue came in at $11.78 billion, which showed a 10.29% growth from the same period last year.

Chubb Limited (NYSE:CB), one of the best dividend-paying stocks, offers a quarterly dividend of $0.91 per share. In May this year, the company achieved its 31st consecutive year of dividend growth. As of August 22, the stock has a dividend yield of 1.34%.

At the end of Q2 2024, 46 hedge funds tracked by Insider Monkey held stakes in Chubb Limited (NYSE:CB), compared with 53 in the previous quarter. The collective value of these stakes is more than $8 billion. With over 27 million shares, Warren Buffett’s Berkshire Hathaway was the company’s largest stakeholder in Q2.

9. Citigroup Inc. (NYSE:C)

AQR Capital’s Stake Value: $302,046,065

Dividend Yield as of August 22: 3.72%

Citigroup Inc. (NYSE:C) is an American multinational investment bank and financial services company. The bank is actively working to enhance its performance. Although its balance sheet remains strong, as indicated by a CET1 ratio of 13.6%, it is also exploring additional strategies to bolster the business. The bank’s wealth management division has started the process of selling its trust administration and fiduciary services platform. This move is part of CEO Jane Fraser’s multi-year plan aimed at improving the bank’s performance, reducing costs, and optimizing operations. In addition, the company is upgrading its infrastructure to serve clients better and automating processes to strengthen controls. In its most recent earnings report, the bank underscored its dedication to ongoing transformation and strategic execution to achieve its medium-term objectives and improve returns over time.

Citigroup Inc. (NYSE:C) grew its quarterly dividend by 5.7% in June this year, after passing the annual Federal Reserve stress test. It is one of the best dividend-paying stocks according to AQR Capital as the company has never missed a dividend in over 34 years. Currently, the company pays a quarterly dividend of $0.56 per share and has a dividend yield of 3.70%, as of August 22. Its payout ratio is also lower with just 34% and the bank returned $1 billion to shareholders in common dividends during the second quarter of 2024.

Investors also noted Citigroup Inc. (NYSE:C)’s dividends and restructuring efforts. Diamond Hill Capital highlighted this in its Q1 2024 investor letter:

“Other top Q1 contributors included Meta Platforms, Citigroup Inc. (NYSE:C) and Walt Disney. Banking and financial services company Citigroup’s restructuring efforts are ongoing, and it continues remediating regulatory issues and building capital in anticipation of increased requirements. The company expects to see expenses fall meaningfully in the second half of 2024, bolstering the outlook from here.”

During the second quarter of 2024, AQR Capital slashed its stake in Citigroup Inc. (NYSE:C) by 16%. The hedge fund owned nearly 5 million shares in the company, worth over $302 million. The company represented 0.46% of the firm’s 13F portfolio at the end of Q2.

Of the 912 hedge funds tracked by Insider Monkey at the end of Q2 2024, 85 funds owned stakes in Citigroup Inc. (NYSE:C), down from 94 in the previous quarter. The consolidated value of these stakes is over $10.6 billion.

8. Comcast Corporation (NASDAQ:CMCSA)

AQR Capital’s Stake Value: $339,222,683

Dividend Yield as of August 22: 3.13%

Comcast Corporation (NASDAQ:CMCSA) is a Pennsylvania-based telecommunications and media conglomerate. It is one of the world’s largest and most diverse businesses in the world. The stock is down by over 10% year-to-date and fell by nearly 4% between July 23 and 24 when the company announced its Q2 earnings. In its Studios and Theme Parks division, the company encountered challenges, falling by 27% and 10.6% from the same period last year, respectively. The company’s overall revenue for the quarter came in at $29.6 billion, down 3% on a YoY basis.

Despite the challenges, several other segments of Comcast Corporation (NASDAQ:CMCSA) experienced growth. The media division saw a return to Adjusted EBITDA growth, largely due to Peacock, its streaming service, which achieved its strongest year-over-year improvement for any quarter since its 2020 launch. A highlight of Comcast’s second-quarter results was the performance of Peacock. Streaming subscribers grew by 38% during the quarter, reaching 33 million, while losses decreased to $348 million, compared to $651 million in Q2 2023.

Comcast Corporation (NASDAQ:CMCSA) generated strong cash during the quarter, which is good news for income investors. The company’s operating cash flow was $4.7 billion and it generated $1.3 billion in free cash flow. It remained committed to its shareholder obligation, returning $3.4 billion to investors through dividends and share repurchases.

On July 23, Comcast Corporation (NASDAQ:CMCSA) declared a quarterly dividend of $0.31 per share, which was in line with its previous dividend. Overall, the company has raised its payouts for 16 consecutive years, which makes CMCSA one of the best dividend-paying stocks on our list. The stock’s dividend yield on August 22 came in at 3.13%.

AQR Capital boosted its stake in Comcast Corporation (NASDAQ:CMCSA) significantly by 93% during the second quarter of 2024 and now owns over 8.7 million shares in the company. The hedge fund’s CMCSA stake was valued at roughly $340 million at the end of the quarter. The company made up 0.51% of the firm’s 13F portfolio.

As of the close of Q2 2024, 61 hedge funds in Insider Monkey’s database held stakes in Comcast Corporation (NASDAQ:CMCSA), compared with 63 in the preceding quarter. These stakes have a total value of over $3.6 billion. Among these hedge funds, First Eagle Investment Management was the company’s leading stakeholder in Q2.

7. Cardinal Health, Inc. (NYSE:CAH)

AQR Capital’s Stake Value: $340,465,462

Dividend Yield as of August 22: 1.84%

Cardinal Health, Inc. (NYSE:CAH) is an American multinational healthcare services company that specializes in the distribution of pharma products and related devices. The company stands to gain from its consistent focus on innovation and technology. Over the past five years, the stock has risen by more than 156%, significantly outpacing the broader market’s 95% gain. Analysts are optimistic about the healthcare sector’s prospects this year, citing ongoing changes fueled by advancements in AI and shifting patient needs. Since the start of 2024, the stock has surged by nearly 7%.

Cardinal Health, Inc. (NYSE:CAH) recently announced its fiscal Q4 2024 earnings, which showed strong operational execution, coupled with significant strategic advancements in the portfolio. The company generated solid cash flow, achieved continued profit growth in the Pharmaceutical and Specialty Solutions segment, and saw notable improvements from the GMPD Improvement Plan. In FY24, the company’s operating cash flow of $3.8 billion and free cash flow of $3.9 billion reached their all-time high. As the new fiscal year begins, the company carries forward momentum and confidence, as reflected in the raised guidance for fiscal year 2025.

Cardinal Health, Inc. (NYSE:CAH), one of the best dividend-paying stocks, currently offers a quarterly dividend of $0.5056 per share. The stock has a dividend yield of 1.84%, as of August 22. In May this year, the company raised its dividend for the 38th consecutive year.

At the end of Q2 2024, AQR Capital held over 3.4 million shares in Cardinal Health, Inc. (NYSE:CAH), worth over $340.4 million. The hedge fund trimmed its position in the company by 4%, with the company now accounting for 0.52% of the firm’s 13F portfolio.

Cardinal Health, Inc. (NYSE:CAH) was a part of 39 hedge fund portfolios at the end of Q2 2024, down from 45 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of over $1.46 billion. Elliott Management was one of the company’s leading stakeholders in the company in Q2.

6. Exxon Mobil Corporation (NYSE:XOM)

AQR Capital’s Stake Value: $410,117,578

Dividend Yield as of August 22: 3.33%

An American energy company, Exxon Mobil Corporation (NYSE:XOM) continued to be a favored choice for AQR Capital. The hedge fund significantly increased its stake in the company by 106% during the second quarter of 2024. The fund owned over 3.5 million shares in the company, valued at over $410 million. The company represented 0.62% of the firm’s 13F portfolio.

Exxon Mobil Corporation (NYSE:XOM) is one of the most popular energy stocks among investors because the company gains a lot from its acquisitions. Earlier in May, the company completed its acquisition of Pioneer Natural Resources. The transaction involved issuing 545 million ExxonMobil shares, valued at $63 billion at the time, and assuming $5 billion in debt. This merger created the world’s largest potential for high-return unconventional resource development. Following the acquisition, the company increased its annual share repurchase program to $20 billion through 2025, contingent on favorable market conditions. The company plans to repurchase over $19 billion worth of shares in 2024.

Madison Investments highlighted a strong business momentum for Exxon Mobil Corporation (NYSE:XOM) in its Q1 2024 investor letter. Here is what the firm has to say:

“This quarter we are highlighting Exxon Mobil Corporation (NYSE:XOM) as a relative yield example in the Energy sector. XOM is a leading integrated oil and natural gas company. It has upstream assets that develop and produce oil and natural gas, along with downstream refining and chemical manufacturing assets. We believe it has attractive low-cost acreage in the Permian basin and has a sizeable growth opportunity in Guyana. Further, we think XOM has a sustainable competitive advantage due to size and scale, and its ability to integrate refining and chemical assets provides a low-cost advantage versus competitors.

Our thesis on XOM is that it will grow production volumes of oil and gas moderately over the next few years, while limiting excessive capital investment that plagued the industry from 2014-2020. Production growth will come from its 2023 acquisition of Pioneer Natural Resources, which is the largest producer in the Permian basin. XOM plans to double its Permian output by 2027, to 2 million barrels per day. Capital spending will be limited to $20-25 billion per year through 2027, which should allow for significant amounts of cash to be returned to shareholders including a $35 billion share repurchase program and continued dividend increases. Higher oil prices would provide a tailwind to our thesis but are not necessary. We think XOM can grow earnings and cash flow if oil prices remain above $60 per barrel…” (Click here to read the full text)

In addition to its acquisitions, Exxon Mobil Corporation (NYSE:XOM)’s cash flow makes it one of the best dividend-paying stocks on our list. In the second quarter of 2024, the company generated $10.6 billion in operating cash flow and its free cash flow for the period came in at $15.2 billion. The company also returned $4.3 billion through dividends to shareholders. It offers a quarterly dividend of $0.41 per share and has a dividend yield of 3.33%, as of August 22. The company holds a 41-year track record of consistent dividend growth.

The number of hedge funds owning stakes in Exxon Mobil Corporation (NYSE:XOM) grew to 92 in Q2 2024, from 81 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of nearly $6.2 billion.

5. AT&T Inc. (NYSE:T)

AQR Capital’s Stake Value: $414,563,251

Dividend Yield as of August 22: 5.71%

AT&T Inc. (NYSE:T) is a Texas-based telecommunications company that offers mobile and broadband services to its consumers. Since the start of 2024, the stock has surged by over 13%, reflecting the company’s journey toward recovery after facing challenges in 2020. Back then, the company’s financial situation was dire, with a net debt of $152 billion. However, its investments in 5G and fiber optic internet networks, along with the growth in these areas, have contributed significantly to its financial turnaround. During the second quarter of 2024, the company repaid $2.2 billion in long-term debt and its net debt now stands at $126.9 billion.

AT&T Inc. (NYSE:T) continued to generate healthy cash flow during the quarter. The company’s operating cash flow, though down $0.8 billion on a YoY basis, came in at $9.1 billion. Its free cash flow, however, grew to $4.6 billion, from $4.2 billion in the prior-year period. The company returned over $2 billion to shareholders through dividends and its payout ratio also improved to 45.9%, from 49.5% in the same period last year.

AT&T Inc. (NYSE:T) pays a quarterly dividend of $0.2775 per share and has an impressive dividend yield of 5.71%, as of August 22. It is one of the best dividend-paying stocks according to AQR Capital as the company has been making uninterrupted dividend payments to shareholders since 1995. During the second quarter, the quant fund owned 21.8 million T shares, after increasing its stake in the company by 44%. The value of the fund’s stake is $414.5 million, which accounted for 0.63% of its 13F portfolio.

Insider Monkey’s database of Q2 2024 indicated that 71 hedge funds owned stakes in AT&T Inc. (NYSE:T), up from 70 in the previous quarter. These stakes are valued at over $2.7 billion. With over 27 million shares, Ken Griffin’s Citadel Investment Group was the company’s leading stakeholder in Q2.

4. Cisco Systems, Inc. (NASDAQ:CSCO)

AQR Capital’s Stake Value: $458,123,113

Dividend Yield as of August 22: 3.17%

Cisco Systems, Inc. (NASDAQ:CSCO) ranks fourth on our list of the best dividend-paying stocks. The American digital communications tech company is reporting strong results, experiencing consistent customer demand, with growth across its operations as clients depend on Cisco to connect and safeguard all areas of their organizations in the age of AI. In its fiscal Q4 2024, the company reported revenue of $13.6 billion, which beat analysts’ estimates by $106.2 million. Its revenue, gross margin, and EPS in Q4 were at or above the high end of the guidance range, reflecting the company’s operational discipline. Moving forward, the focus remains sharply on growth and consistent execution, with strategic investments in AI, cloud, and cybersecurity, while continuing to prioritize capital returns.

Cisco Systems, Inc. (NASDAQ:CSCO)’s $28 billion acquisition of Splunk earlier this year is a key part of its strategy for cyber threat improvement. The addition of the data analytics and cybersecurity firm proved beneficial, contributing $960 million to the company’s revenue in fiscal Q4 2024. The investment has led the company into a net debt position, aimed at supporting growth and boosting returns for shareholders. CFO Scott Herren mentioned in an interview that the company will have the option to either reduce its debt or keep it, depending on future interest rates. He highlighted that Cisco Systems, Inc. (NASDAQ:CSCO) will focus on disciplined capital allocation and growth investments rather than solely targeting debt reduction.

That said, Cisco Systems, Inc. (NASDAQ:CSCO)’s debt position shouldn’t be the main concern for investors because of its strong cash generation. The company’s operating cash flow in the most recent quarter was approximately $3.7 billion and it ended the quarter with nearly $18 billion available in cash and cash equivalents. Reflecting the CEO’s focus on capital allocation, the company returned $1.6 billion to shareholders through dividends.

Cisco Systems, Inc. (NASDAQ:CSCO) offers a quarterly dividend of $0.40 per share and has a dividend yield of 3.17%, as of August 22. It is one of the best dividend-paying stocks according to AQR Capital as the company has been rewarding shareholders with growing dividends for the past 17 consecutive years.

According to Insider Monkey’s database of Q2 2024, 61 hedge funds owned stakes in Cisco Systems, Inc. (NASDAQ:CSCO), growing from 58 a quarter earlier. The consolidated value of these stakes is roughly $1.6 billion.

3. Broadcom Inc. (NASDAQ:AVGO)

AQR Capital’s Stake Value: $483,336,114

Dividend Yield as of August 22: 1.24%

Broadcom Inc. (NASDAQ:AVGO) is a California-based multinational semiconductor company that offers a wide range of semiconductor and infrastructure software products. The company offers network and data center solutions, along with cloud-based tools, through its subsidiary, VMware. Although about 60% of the company’s revenue comes from semiconductor solutions, its infrastructure software segment is also experiencing significant growth. The company offers a compelling opportunity at the crossroads of AI and semiconductors. Over the past year, the stock has risen by nearly 90%, prompting management to implement a 10-for-1 stock split in July to make Broadcom shares more accessible to investors and employees.

Baron Funds highlighted the company’s AI segment in its Q2 2024 investor letter. Here is what the firm has to say about Broadcom Inc. (NASDAQ:AVGO):

“Broadcom Inc. (NASDAQ:AVGO) is a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The stock rose during the quarter as it reported strong earnings on the back of its two key growth drivers, AI semiconductors and its acquired VMware software business. The company once again increased its outlook for AI-related revenue, now expecting $11 billion or more this year (versus prior guidance for $10 billion), on the back of strength in both hyperscale custom compute and networking chips, where Broadcom maintains dominating share. In networking, Broadcom’s solutions are critical to enabling AI training factories to scale towards 100,000 chip clusters in the near term and 1 million chip clusters over the coming years. In AI custom compute, Broadcom designs custom accelerators for large consumer- internet AI companies (such as Google and Meta), who are building increasingly large AI clusters to drive improvements in user engagement and targeted advertising on their consumer media platforms. VMware remains on track to continue rapid sequential growth while simultaneously reducing operating expenses, driving faster-than-expected margin expansion and accretion, as management has simplified the product offering and is converting customers from a license model to subscriptions. We believe VMware will grow beyond the $4 billion near-term quarterly target, well above current analyst expectations. These two factors combined have caused a re-rating to the growth profile for the overall company. To quote CEO Hock Tan, “there is only one Broadcom. Period.”

When we evaluate Broadcom Inc. (NASDAQ:AVGO) from a dividend perspective, it becomes clear that its strong cash generation sets it apart from its competitors, particularly within the tech industry. In the second quarter of 2024, the company generated over $4.5 billion in operating cash flow and its free cash flow for the period came in at over $4.4 billion. The free cash flow represented 36% of the company’s revenue. During the quarter, it also distributed $2.5 billion worth of dividends among shareholders, which makes it one of the best dividend-paying stocks on our list.

Though many tech companies offer dividends, only a few consistently deliver substantial returns to shareholders. Broadcom Inc. (NASDAQ:AVGO) is notable for its strong dividend history. Since initiating dividends in 2011, the company has increased its payouts annually. Over the years, its annual dividend has risen from $0.36 per share to $21.00 per share. Its quarterly dividend comes in at $5.25 per share for a dividend yield of 1.24%, as of August 22.

Broadcom Inc. (NASDAQ:AVGO) was a popular buy among elite funds during the second quarter of 2024 as the hedge fund positions in the company jumped to 130, from 115 in the previous quarter. The stakes owned by these hedge funds are valued at over $20 billion in total. Among these hedge funds, GQG Partners was the company’s leading stakeholder in Q2.

2. Johnson & Johnson (NYSE:JNJ)

AQR Capital’s Stake Value: $489,176,124

Dividend Yield as of August 22: 3.08%

Johnson & Johnson (NYSE:JNJ) is an American pharmaceutical industry company that specializes in a wide range of biotech and medical products and also offers related services to consumers. The company has consistently grown its portfolio through various acquisitions. Recently, it announced plans to acquire the medical device company V-Wave for an initial payment of $600 million. The deal also includes potential milestone payments of up to $1.1 billion, contingent on regulatory and commercial achievements, and is expected to be finalized by the end of 2024. These acquisitions have consistently bolstered the company’s resilience. In the past five years, it has surged by nearly 27%.

Analysts have also recognized this resilience. A recent S&P Global report highlighted Johnson & Johnson (NYSE:JNJ) as one of the strongest pharmaceutical companies, citing its lower business and financial risks compared to other major drugmakers. The report commends the company for its significant scale and portfolio filled with blockbuster drugs, emphasizing the competitive advantages gained from sustainable innovations. These innovations enable premium pricing and product differentiation. The assessment considers factors like the company’s R&D investments, its strong R&D track record, the strength of its pipeline and marketing, and its ability to sustain long-term revenue growth and strong margins, even as products lose exclusivity.

During the second quarter of 2024, AQR Capital increased its position in Johnson & Johnson (NYSE:JNJ) by 39% and ended the quarter with over 3.3 million JNJ shares. These shares have a value of over $489 million, which made up 0.74% of the firm’s 13F portfolio.

Johnson & Johnson (NYSE:JNJ) is a Dividend King with 62 consecutive years of dividend growth under its belt. The company offers a quarterly dividend of $1.24 per share and has a dividend yield of 3.08%, as recorded on August 22. It is among the best dividend-paying stocks on our list.

At the end of June 2024, 80 hedge funds tracked by Insider Monkey were bullish on Johnson & Johnson (NYSE:JNJ), owning stakes worth nearly $4.7 billion in total.

1. The Cigna Group (NYSE:CI)

AQR Capital’s Stake Value: $510,466,955

Dividend Yield as of August 22: 1.64%

The Cigna Group (NYSE:CI) tops our list of the best dividend-paying stocks according to AQR Capital. The managed healthcare and insurance company is experiencing some of the downturn affecting the broader insurance sector. US health insurers have had a challenging first half of the year, dealing with unforeseen medical expenses, increased regulatory scrutiny, and growing investor skepticism. According to the latest CDC data, the percentage of Americans without health insurance has risen to over 8% this year, after reaching record lows during the pandemic. That said, The Cigna Group (NYSE:CI) has managed to maintain a solid position, with its stock rising over 12% this year. The company also reported strong earnings in the second quarter of 2024.

The Cigna Group (NYSE:CI) generated revenue of $60.4 billion in Q2 2024, which shows a 25% growth from the same period last year. Its adjusted income from operations came in at $1.9 billion, up from $1.8 billion in the prior year period. The company has also presented a strong outlook for its cash flow for FY24, expecting to generate approximately $11 billion in operating cash flow during the year.

On July 24, The Cigna Group (NYSE:CI) declared a quarterly dividend of $1.40 per share, which was consistent with its previous dividend. Overall, the company has raised its payouts for four consecutive years. The stock supports a dividend yield of 1.64%, as of August 22.

The number of hedge funds in Insider Monkey’s database owning stakes in The Cigna Group (NYSE:CI) grew to 66 in Q2 2024, from 61 in the previous quarter. The collective value of these stakes is over $2.77 billion. In addition to AQR Capital, Glenview Capital was also one of the company’s leading stakeholders in Q2.

While we acknowledge the potential of CI as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued dividend stock that is more promising than CI but that trades at less than 7 times its earnings and yields nearly 10%, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.