10 Best January Dividend Stocks To Buy

3. CVS Health Corporation (NYSE:CVS)

Ex-Dividend Date: January 23

CVS Health Corporation (NYSE:CVS) ranks third on our list of the best dividend stocks. The American healthcare company operates a retail pharmacy chain. It leverages its vast retail network to offer a comprehensive range of health services and pharmacy benefits, bolstered by its Aetna health insurance division, which covers more than 27 million members. Despite the goal of this vertically integrated model to achieve cost savings and improve efficiency across the healthcare supply chain, recent performance has not met expectations. Increased enrollment in its health plans, particularly among seniors in Medicare Advantage programs, along with high service utilization and ongoing cost pressures, has impacted profitability.

That said, CVS Health Corporation (NYSE:CVS) delivered strong earnings in the third quarter of 2024, with revenue reaching $95.4 billion, reflecting a year-over-year growth of over 6.3%. The results highlighted solid performance in the Health Services and Pharmacy & Consumer Wellness segments. However, they also underscored the need for a collaborative effort across the company to tackle the macroeconomic challenges affecting the Health Care Benefits segment.

In addition, CVS Health Corporation (NYSE:CVS) reported a strong cash position in the most recent quarter. In the first nine months of the year, the company reported an operating cash flow of $7.2 billion. By the end of the quarter, the company had $6.9 billion in cash and cash equivalents. While CVS does not have a record of consecutive dividend increases, it has consistently paid dividends to shareholders since 1997. Its quarterly dividend sits at $0.665 per share for a dividend yield of 5.81%, as of January 5.

Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 63 hedge funds held stakes in CVS Health Corporation (NYSE:CVS), up from 60 in the preceding quarter. These stakes are worth over $4.2 billion in total. With more than 13 million shares, Pzena Investment Management was the company’s leading stakeholder in Q3.