In this article, we discuss 10 best dividend stocks on Robinhood. If you want to read about some more dividend stocks on Robinhood, check out 5 Best Dividend Stocks on Robinhood.
Stock trading applications like Robinhood Markets, Inc. (NASDAQ:HOOD) have taken the investing world by storm in the past few years, prompting a new generation of investors to turn their attention towards the equity markets in the United States. These retail traders, who are also active on internet platforms like Reddit, have taken on hedge funds in a battle of market supremacy that looks set to shape the future of markets. Retail traders often invest in growth firms and do not pursue value-oriented dividend stocks.
However, as interest rates rise and inflation shows no signs of slowing down, a value-friendly marketplace, where stocks like Chevron Corporation (NYSE:CVX), Gilead Sciences, Inc. (NASDAQ:GILD), and Philip Morris International Inc. (NYSE:PM) are trending on the up, has forced these retail traders to consider dividend-paying firms as investment options in order to protect their growth-heavy portfolios from being obliterated in the current macro environment.
Even Robinhood Markets, Inc. (NASDAQ:HOOD) shares are down 45% year-to-date. Despite the fall, hedge funds continue to bet on the long-term potential of the stock. Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm ARK Investment Management is a leading shareholder in the firm as of Q3 2022, with 32.9 million shares worth more than $332 million. At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $616 million in Robinhood Markets, Inc. (NASDAQ:HOOD), compared to 19 the preceding quarter worth $947 million.
Our Methodology
The companies that are popular on Robinhood and have solid dividend profiles were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Sharon McCutcheon on Unsplash
Best Dividend Stocks on Robinhood
10. BWX Technologies, Inc. (NYSE:BWXT)
Number of Hedge Fund Holders: 27
Dividend Yield as of October 20: 1.61%
BWX Technologies, Inc. (NYSE:BWXT) manufactures and sells nuclear components in the United States, Canada, and internationally. It is one of the best dividend stocks to invest in. On October 13, BWX Technologies announced that it has agreed to complete an amended and restated credit agreement with Wells Fargo Bank and other lenders, which increases the company’s liquidity while improving a number of key terms for BWX Technologies.
On October 11, Credit Suisse analyst Scott Deuschle initiated coverage of BWX Technologies, Inc. (NYSE:BWXT) stock with an Outperform rating and a $65 price target, noting that the company had an exceptional free cash flow outlook and the ability to sustain mid-single digit revenue growth through 2024 in its core navy nuclear business.
At the end of the second quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $322.5 million in BWX Technologies, Inc. (NYSE:BWXT), compared to 27 the preceding quarter worth $307.4 million.
Just like Chevron Corporation (NYSE:CVX), Gilead Sciences, Inc. (NASDAQ:GILD), and Philip Morris International Inc. (NYSE:PM), BWX Technologies, Inc. (NYSE:BWXT) is one of the best dividend stocks to buy according to hedge funds.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and BWX Technologies, Inc. (NYSE:BWXT) was one of them. Here is what the fund said:
“We also added BWX Technologies, Inc. (NYSE:BWXT), which manufactures and sells nuclear components globally. BWX supplies nuclear reactors to the U.S. Navy and commercial power producers, primarily in Canada, as well as a nascent offering in nuclear medicine raw materials. With roughly 80% of the company tied to a highly visible and well-funded defense priority (nuclear submarines), the company should drive steady and defensive growth with multiple upside drivers from greater acceptance of nuclear energy’s role in the energy transition coupled with technology advances in micro-reactors and small modular reactors.”
9. Amdocs Limited (NASDAQ:DOX)
Number of Hedge Fund Holders: 27
Dividend Yield as of October 20: 1.95%
Amdocs Limited (NASDAQ:DOX) provides software and services worldwide. It is one of the top dividend stocks to invest in. On June 29, Unicard, an integrated ticketing and travel experience provider, and Amdocs collaborated to encourage passengers to use sustainable forms of transport by removing the payment friction of switching one mode of travel to another and providing real time payment and charging updates.
On August 3, Barclays analyst Tavy Rosner maintained an Equal Weight rating on Amdocs Limited (NASDAQ:DOX) stock and raised the price target to $95 from $89, highlighting the company’s solid fiscal Q3 results.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Management is a leading shareholder in Amdocs Limited (NASDAQ:DOX), with 6.3 million shares worth more than $528.8 million.
In its Q2 2021 investor letter, Palm Valley Capital Management, an asset management firm, highlighted a few stocks and Amdocs Limited (NASDAQ:DOX) was one of them. Here is what the fund said:
“The top contributors to the Fund’s second quarter returns (includes) Amdocs Limited (NASDAQ:DOX). Amdocs’ stock has fully recovered from the erroneous, widely disseminated anonymous short seller report issued on the final day of the first quarter. Amdocs’ organic growth is the strongest it has been in years, and the company is delivering excellent free cash flow.”
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 40
Dividend Yield as of October 20: 5.39%
International Business Machines Corporation (NYSE:IBM) provides integrated technology solutions and services worldwide. It is one of the premier dividend stocks to invest in. On September 27, International Business Machines revealed that it has entered into a strategic partnership with Saudi Data and Artificial Intelligence Authority to drive adoption of artificial intelligence in the carbon capture and industrial domains across the Kingdom of Saudi Arabia.
On October 17, Stifel analyst David Grossman maintained a Buy rating on International Business Machines Corporation (NYSE:IBM) stock and lowered the price target to $140 from $150, noting that the firm’s growth hasn’t slowed down despite most large-cap tech stocks being affected by macro conditions.
At the end of the second quarter of 2022, 40 hedge funds in the database of Insider Monkey held stakes worth $948.3 million in International Business Machines Corporation (NYSE:IBM), compared to 43 in the previous quarter worth $1.16 billion.
In its Q4 2021 investor letter, St. James Investment Company, an asset management firm, highlighted a few stocks and International Business Machines Corporation (NYSE:IBM) was one of them. Here is what the fund said:
“International Business Machines Corporation (NYSE:IBM) was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (read more)
7. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 55
Dividend Yield as of October 20: 3.13%
Amgen Inc. (NASDAQ:AMGN) discovers, develops, manufactures, and delivers human therapeutics worldwide. It is one of the major dividend stocks to invest in. On October 17, Evotec and Toronto Innovation Partners stated that they have expanded their transnational BRIDGE partnership LAB150 to include Amgen as a strategic partner. The expansion will go along with a combined investment of $14 million to expedite LAB150 programs for forming new life sciences companies.
On October 12, Barclays analyst Carter Gould maintained an Equal Weight rating on Amgen Inc. (NASDAQ:AMGN) stock and lowered the price target on Amgen to $234 from $236, noting that there was another round of challenging setups for biopharmaceuticals in Q3.
In its Q2 2022 investor letter, Aristotle Capital Management, an asset management firm, highlighted a few stocks and Amgen Inc. (NASDAQ:AMGN) was one of them. Here is what the fund said:
“Amgen Inc. (NASDAQ:AMGN), the pharmaceutical company focused on biotechnology-based therapeutics, was also a top contributor for the quarter. The company reported solid results, with a variety of products, such as bone-strengthening drugs Prolia and EVENITY, contributing to overall revenue growth. Amgen continued to increase the market share for cholesterol drug Repatha (a catalyst we had originally identified), delivering record quarterly sales as the drug’s usage expands with high-risk patients who have not yet had a cardiovascular event, and as barriers for prescribers, healthcare systems and patients are removed. In addition, we believe the company is poised to gain market share with its biosimilars (akin to generic versions of biologic drugs), also a previously identified catalyst. Biosimilars accounted for over $2 billion in revenue in 2021, and we believe this has the potential to more than double by the end of the decade, accelerated by six additional biosimilars (for a total of 11 products on the market). This includes the upcoming launch in the U.S. of arthritis treatment Amjetiva in January 2023. Meanwhile, the company is advancing its robust pipeline of early- and late-stage assets, with several phase III results due this year. These developments have caused us to remain enthusiastic about Amgen’s ability to build on its decades of success developing novel treatments using biopharmaceuticals.”
6. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 58
Dividend Yield as of October 20: 7.14%
Verizon Communication Inc. (NYSE:VZ) offers communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It is one of the prominent dividend stocks to invest in. On October 5, Verizon Communications stated that it has secured a task order to provide IT services for US embassies and other key locations around the globe. The Enterprise Infrastructure Solutions contract will be worth $1.58 billion over next 10 years.
On October 6, Oppenheimer analyst Timothy Horan upgraded Verizon Communications Inc. (NYSE:VZ) stock to Outperform from Perform with a $50 price target, highlighting the gradual stabilization-to-growth of the company’s subscriber base.
Along with Chevron Corporation (NYSE:CVX), Gilead Sciences, Inc. (NASDAQ:GILD), and Philip Morris International Inc. (NYSE:PM), Verizon Communication Inc. (NYSE:VZ) is one of the best dividend stocks to buy according to hedge funds.
In its Q3 2022 investor letter, Mawar Investment Management, an asset management firm, highlighted a few stocks and Verizon Communication Inc. (NYSE:VZ) was one of them. Here is what the fund said:
“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) has been impacted as wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”
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Disclosure. None. 10 Best Dividend Stocks on Robinhood is originally published on Insider Monkey.