In this article, we will be taking a look at 10 dividend stocks that raised their dividend in 2021. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Dividend Stocks That Raised Their Dividend in 2021.
Dividend investing is not straightforward. That’s why expert income investors look at a range of metrics to determine which stock would be the best fit for their portfolio. Some key metrics include payout ratio, price-to-book ratio, the Sharpe ratio, and even the frequency of dividend increases over set time periods. Only by carefully analyzing these factors, and more, can one be somewhat certain about investing in any stock, even those typically considered to perform well, like Exxon Mobil Corporation (NYSE: XOM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), and PepsiCo, Inc. (NASDAQ: PEP), among others.
When looking at dividend stocks in particular, though, one must take into account the relevant company’s dividend history. Companies that have recently slashed or eliminated dividends may thus not be the smartest investment choices for any investors, while those that have managed to consistently increase their yields, like the dividend aristocrats with 25 or more years of consistent increases, or dividend kings with 50 or more years of the same, may be good investment options. Within these categories of dividend stocks as well, we should look at yield as a deciding factor, particularly in rising rate environments.
Research conducted by Global X, for instance, found some interesting findings on the performance of high dividend stocks in rising rate environments. The study has analyzed the performance and behavior of the highest decile of dividend-yielders from 1960 to 2017 to come up with conclusive evidence that high-yielding dividend stocks can, and have, outperformed the market at large. Firstly, it was found that these stocks managed to generate an average annual dividend yield of 6.4% in the time period studied. Secondly, it was also estimated that the highest-yielding stocks outperformed the S&P 500 by about 3% per year, between 1960 and 2017. And lastly, it was mentioned that in 7 out of 10 rising interest rate periods during the studied time period, dividend stocks with higher yields yet again managed to outperform the S&P 500 at an annualized average rate of about 0.80%. Hence, a very strong case can be made in favor of high-yielding dividend stocks particularly in times of rising interest.
Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let’s take a look at the 10 dividend stocks that raised their dividend in 2021.
Our Methodology
We have selected dividend-yielding stocks with yields going up to 7% and above. Insider Monkey tracks the data of about 873 hedge funds, and we have also used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield and the number of hedge funds holding a stake in it, ranking them from the lowest to the highest dividend yield. Finally, we have used analysts’ ratings to determine which stocks are favorably placed in analyst and investor circles, picking stocks with mostly positive ratings and strong fundamentals.
Dividend Stocks That Raised Their Dividend in 2021
10. Ally Financial Inc. (NYSE: ALLY)
Number of Hedge Fund Holders: 54
Dividend Yield: 2%
Ally Financial Inc. (NYSE: ALLY) operates primarily in America and Canada as a bank holding company. The company works to serve consumer, commercial, and corporate customers, providing them with digital financial products and services. It ranks 10th on our list of dividend stocks that raised their dividend in 2021.
Just this July, Citigroup raised the price target on shares of Ally Financial Inc. (NYSE: ALLY), from $59 to $63. The firm also reiterated a Buy rating on the stock.
In the second quarter of 2021, Ally Financial Inc. (NYSE: ALLY) had an EPS of $2.33, beating estimates by $0.83. The company’s revenue was $2.08 billion, up 29.58% year over year and also beating estimates by $213.29 million. Ally Financial Inc. (NYSE: ALLY) has also gained 11.81% in the past 6 months and 44.03% year to date.
By the end of the second quarter of 2021, 54 hedge funds out of the 873 tracked by Insider Monkey held stakes in Ally Financial Inc. (NYSE: ALLY) worth roughly $2.4 billion. This is compared to 51 hedge funds in the previous quarter with a total stake value of approximately $2.8 billion.
Like Exxon Mobil Corporation (NYSE: XOM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), and PepsiCo, Inc. (NASDAQ: PEP), Ally Financial Inc. (NYSE: ALLY) is a notable stock pick today.
9. Ares Management Corporation (NYSE: ARES)
Number of Hedge Fund Holders: 20
Dividend Yield: 2.4%
Ares Management Corporation (NYSE: ARES), a capital market company, operates as a global alternative investment manager. It works with three integrated businesses in the credit, private equity, and real estate markets, and ranks 9th on our list of dividend stocks that raised their dividend in 2021.
BMO Capital just this August raised the price target on shares of Ares Management Corporation (NYSE: ARES) from $77 to $85, while also reiterating an Outperform rating on the stock.
In the second quarter of 2021, Ares Management Corporation (NYSE: ARES) had an EPS of $0.64, beating estimates by $0.12. The company’s revenue was $478.36 million, also beating estimates by $28.89 million. Ares Management Corporation (NYSE: ARES) has gained 44.03% in the past 6 months and 69.09% year to date.
By the end of the second quarter of 2021, 20 hedge funds out of the 873 tracked by Insider Monkey held stakes in Ares Management Corporation (NYSE: ARES) worth roughly $686 million. This is compared to 16 hedge funds in the previous quarter with a total stake value of approximately $565 million.
Like Exxon Mobil Corporation (NYSE: XOM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), and PepsiCo, Inc. (NASDAQ: PEP), Ares Management Corporation (NYSE: ARES) is a notable stock pick today.
8. Best Buy Co., Inc. (NYSE: BBY)
Number of Hedge Fund Holders: 27
Dividend Yield: 2.5%
Best Buy Co., Inc. (NYSE: BBY) is a consumer discretionary company that retails technology products in the US and Canada. The company ranks 8th on our list of dividend stocks that raised their dividend in 2021 and operates through it Domestic and International segments.
This August, Wedbush raised its price target on shares of Best Buy Co., Inc. (NYSE: BBY) from $125 to $130. The firm also reiterated a Neutral rating on the stock.
In the fiscal second quarter of 2022, Best Buy Co., Inc. (NYSE: BBY) had an EPS of $2.98, beating estimates by $1.09. The company’s revenue was $11.85 billion, up 19.57% year over year and beating estimates by $313.13 million. Best Buy Co., Inc. (NYSE: BBY) has gained 2.55% in the past 6 months and 10.81% year to date.
By the end of the second quarter of 2021, 27 hedge funds out of the 873 tracked by Insider Monkey held stakes in Best Buy Co., Inc. (NYSE: BBY) worth roughly $984 million. This is compared to 33 hedge funds in the previous quarter with a total stake value of approximately $957 million.
7. Jefferies Financial Group Inc. (NYSE: JEF)
Number of Hedge Fund Holders: 29
Dividend Yield: 2.7%
Jefferies Financial Group Inc. (NYSE: JEF) is a financial services company that works in the investment banking and capital markets, alongside working with asset management and direct investing businesses in the US, Europe, the Middle East, Africa, and Asia. The company ranks 7th on our list of dividend stocks that raised their dividend in 2021.
In the second quarter of 2021, Jefferies Financial Group Inc. (NYSE: JEF) had an EPS of $1.30, beating estimates by $0.40. The company’s revenue was $4.44 billion, up 286.68% year over year and beating estimates by $2.86 billion. Jefferies Financial Group Inc. (NYSE: JEF) has gained 14.08% in the past 6 months and 47.54% year to date.
By the end of the second quarter of 2021, 29 hedge funds out of the 873 tracked by Insider Monkey held stakes in Jefferies Financial Group Inc. (NYSE: JEF) worth roughly $698 million. This is compared to 38 hedge funds in the previous quarter with a total stake value of approximately $700 million.
Like Exxon Mobil Corporation (NYSE: XOM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), and PepsiCo, Inc. (NASDAQ: PEP), Jefferies Financial Group Inc. (NYSE: JEF) is a notable stock pick today.
Miller/Howard Investments, an investment management firm, mentioned Jefferies Financial Group Inc. (NYSE: JEF) in its first-quarter 2021 investor letter. Here’s what they said:
“We bought two new financials this quarter (including), Jefferies (JEF). Both were selling at a discount to book value and should benefit from the improving economy, in our opinion.”
6. Newmont Corporation (NYSE: NEM)
Number of Hedge Fund Holders: 55
Dividend Yield: 3.9%
Newmont Corporation (NYSE: NEM) is a materials company working to produce and explore gold. The company also explores for copper, silver, zinc, and lead. It ranks 6th on our list of dividend stocks that raised their dividend in 2021.
As of this September, National Bank analysts hold an Outperform rating on shares of Newmont Corporation (NYSE: NEM).
In the second quarter of 2021, Newmont Corporation (NYSE: NEM) had an EPS of $0.83, beating estimates by $0.06. The company’s revenue was $3.06 billion, up 29.6% year over year and beating the previous quarter’s revenue of $2.87 billion.
By the end of the second quarter of 2021, 55 hedge funds out of the 873 tracked by Insider Monkey held stakes in Newmont Corporation (NYSE: NEM) worth roughly $1.3 billion. This is compared to 43 hedge funds in the previous quarter with a total stake value of approximately $994 million.
Like Exxon Mobil Corporation (NYSE: XOM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), and PepsiCo, Inc. (NASDAQ: PEP), Newmont Corporation (NYSE: NEM) is a notable stock pick today.
Click to continue reading and see the 5 Stocks That Raised Their Dividend in 2021.
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Disclosure: None. 10 Dividend Stocks That Raised Their Dividend in 2021 is originally published on Insider Monkey.
