In this article, we discuss 10 best February dividend stocks to buy. You can skip our detailed analysis of dividend investment and returns of dividend stocks over the years, and go directly to read 5 Best February Dividend Stocks To Buy.
As stock valuations slumped to their lowest levels in 2022, dividend stocks’ performance remained stable. According to a report by Fidelity, during decades when inflation was high since 1930, dividends represented 54% of the stock market’s returns. Moreover, the companies that continuously raised their dividends during high inflationary periods outplayed the broader market.
According to a report by iShares, dividend growers fell by 12.5% in bear markets from December 1978 to December 2021, whereas non-dividend payers reported a 30.7% decline in the same period. The report also referred to Bloomberg’s data from December 1999 to December 2021 and highlighted that equity dividends have become the primary source of income in a typical 60/40 portfolio.
Another report by JPMorgan revealed that dividends have shown resilience during recessionary periods, even when earnings-per-share tend to drop. The report also mentioned during the high-inflation decade of the 1970s, dividends represented two-thirds of the S&P 500 total return.
Dividend companies that have grabbed investors’ attention over the years include The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG) as these companies have raised their payouts for decades, offering long-term benefits to investors.
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Our Methodology:
For this article, we first identified dividend stocks that pay monthly dividends to shareholders. From the long list of these stocks, we chose the ones that have the highest number of hedge funds invested in them. This metric was gauged using Insider Monkey’s database of 920 hedge funds and their holdings as of Q3 2022. The list is ranked in ascending order of the number of hedge funds having stakes in the companies. These are some of the best monthly dividend stocks for investors, according to hedge funds, who are looking to pile into monthly dividend stocks in February.
10 Best February Dividend Stocks To Buy
10. LTC Properties, Inc. (NYSE:LTC)
Number of Hedge Fund Holders: 5
LTC Properties, Inc. (NYSE:LTC) is a California-based real estate investment trust company that mainly invests in healthcare and senior housing facilities. Recently, the company announced an investment of nearly $128 million in 12 assisted living care properties throughout North Carolina. This investment was funded using the company’s line of credit.
On January 3, LTC Properties, Inc. (NYSE:LTC) declared a monthly dividend of $0.91 per share, which was in line with its previous dividend. The stock has a dividend yield of 6%, as of January 30. It can be a good investment option alongside some of the best dividend stocks like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG).
At the end of September 2022, LTC Properties, Inc. (NYSE:LTC) had $6.4 million in cash and cash equivalents, compared with $5.1 million at the end of 2021. The company’s revenue for Q3 2022 came in at $43.5 million, beating analysts’ estimates by $1.8 million.
At the end of Q3 2022, 5 hedge funds tracked by Insider Monkey owned stakes in LTC Properties, Inc. (NYSE:LTC), compared with 6 in the previous quarter. The collective value of these stakes is over $8.5 million. Citadel Investment Group was the company’s leading stakeholder among these hedge funds.
9. Ellington Financial Inc. (NYSE:EFC)
Number of Hedge Fund Holders: 5
Ellington Financial Inc. (NYSE:EFC) is an American real estate credit company that invests in a wide range of financial assets. The company reported a 1.1% growth in its estimated book value per share in December to $15.05. In the third quarter of 2022, it reported a net interest income of $36.5 million while its adjustable distributable earnings came in at $26.5 million. The company had $175.2 million in cash and cash equivalents at the end of the quarter.
On January 9, Ellington Financial Inc. (NYSE:EFC) declared a monthly dividend of $0.15 per share. The stock has a dividend yield of 13.3%, as of January 30. The company’s strong balance sheet and consistent monthly payments make it one of the best dividend stocks on our list.
Ellington Financial Inc. (NYSE:EFC) was a part of 5 hedge fund portfolios in Q3 2022, compared with 4 in the previous quarter. The stakes owned by these hedge funds have a total value of $11.7 million. Among these hedge funds, Ellington was the company’s leading stakeholder in Q3.
8. Prospect Capital Corporation (NASDAQ:PSEC)
Number of Hedge Fund Holders: 5
Prospect Capital Corporation (NASDAQ:PSEC) is a New York-based business development company that specializes in debt and equity markets across the country. As of September 2022, the company had over $8.6 billion in assets under management. It is one of the best dividend stocks on our list.
Prospect Capital Corporation (NASDAQ:PSEC) announced its fiscal Q1 2023 earnings on November 9, 2022. The company posted a total investment income of $202.6 million, which showed a 19.6% growth from the same period last year. Moreover, it paid $1.4 billion to shareholders in dividends and share repurchases during the quarter.
Prospect Capital Corporation (NASDAQ:PSEC) currently pays a monthly dividend of $0.06 per share and has a dividend yield of 9.63%, as recorded on January 30.
As of the close of Q3 2022, 5 hedge funds tracked by Insider Monkey owned stakes in Prospect Capital Corporation (NASDAQ:PSEC), compared with 7 in the previous quarter. The collective value of these stakes is over $10 million. Two Sigma Advisors owned the largest stake in the company in Q3.
7. Main Street Capital Corporation (NYSE:MAIN)
Number of Hedge Fund Holders: 8
Main Street Capital Corporation (NYSE:MAIN) is a Houston-based principal investment firm that provides long-term equity and debt to lower-middle market companies. As of December 31, the company estimated its net asset value to be between $26.83 to $26.86 per share, which represented an increase from $25.94 per share as of September 30, 2022. This rise in NAV is mainly due to private loan portfolio investments.
In December, B. Riley initiated its coverage on Main Street Capital Corporation (NYSE:MAIN) with a Buy rating and a $42 price target. The firm mentioned that the company is well-positioned to outperform this year because of its attractive balance sheet and dividend portfolios.
In the third quarter of 2022, Main Street Capital Corporation (NYSE:MAIN) has a distributable net investment income of $65.8 million. The company’s total investment income for the quarter came in at $98.3 million, which showed a 28% growth from the prior-year quarter.
Main Street Capital Corporation (NYSE:MAIN), one of the best dividend stocks on our list, pays a monthly dividend of $0.225 per share, having raised it by 2.3% in November 2022. The company also announced a supplemental dividend of $0.10 per share. The stock’s dividend yield on January 30 came in at 6.89%.
As of the end of September 2022, 8 hedge funds tracked by Insider Monkey owned stakes in Main Street Capital Corporation (NYSE:MAIN), up from 5 in the previous quarter. The collective value of these stakes is over $20.7 million. McKinley Capital Management was the company’s leading stakeholder in Q3.
6. Pembina Pipeline Corporation (NYSE:PBA)
Number of Hedge Fund Holders: 17
Pembina Pipeline Corporation (NYSE:PBA) is a Canadian pipeline transport company that also has natural gas processing business. On December 5, the company declared a monthly dividend of C$0.2175 per share, consistent with its previous dividend. It has been raising its dividends consistently for the past six years. As of January 30, the stock has a dividend yield of 5.52%.
In addition to some of the best dividend stocks like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG), investors and analysts are also paying attention to Pembina Pipeline Corporation (NYSE:PBA) due to its consistent monthly payouts.
In January, National Bank appreciated the performance of Pembina Pipeline Corporation (NYSE:PBA) and presented a positive outlook for the sector. Given this, the firm raised its price target on the stock to C$47 with a Sector Perform rating on the shares.
In the third quarter of 2022, Pembina Pipeline Corporation (NYSE:PBA) reported revenue of C$2.78 billion, which showed a 29.3% growth from the same period last year. The company’s operating cash flow came in at C$767 million. During the quarter, it also repurchased $155 million worth of common shares.
At the end of Q3 2022, 17 hedge funds tracked by Insider Monkey owned stakes in Pembina Pipeline Corporation (NYSE:PBA), up from 14 in the previous quarter. The collective value of these stakes is over $81 million. Two Sigma Advisors was one of the company’s leading stakeholders in Q3.
ClearBridge Investments mentioned Pembina Pipeline Corporation (NYSE:PBA) in its Q1 2022 investor letter. Here is what the firm has to say:
“On a regional basis, the U.S. and Canada were the top contributors to quarterly performance. Pembina Pipeline, which provides transportation and midstream services for the energy industry in North America, was also up on greater LNG demand. The hiring of Scott Burrows as permanent CEO and Jaret Sprott as COO and reaffirmation of its corporate strategy also boosted investor sentiment. On an individual stock basis, the largest contributors to absolute returns in the quarter includes Pembina Pipeline.”
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Disclosure. None. 10 Best February Dividend Stocks To Buy is originally published on Insider Monkey.
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