In this article, we discuss 10 dividend stocks with over 2% yield. If you want to skip our detailed analysis of these stocks, go directly to 5 Dividend Stocks With Over 2% Yield.
After two consecutive quarters of economic contraction, fears of a potential economic slowdown, and rising inflation, the stock market’s volatility has increased and the markets have declined substantially year to date.
With the Federal Reserve expected to raise interest rates further, the markets could decline if economic data fails to meet expectations. Given the uncertainty, diversifying into different sectors and different stocks could be a good idea.
One set of stocks, dividend stocks, have also fallen with the market given the weak economic conditions. With the lower valuations, however, there could be an opportunity for long term investors who buy quality stocks.
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Our Methodology:
For our list, we selected 10 blue chip stocks with dividend yields exceeding 2% as of September 27 and we sorted them based on the number of hedge fund holders in our database that owned shares in the same stock as of the end of Q2 2022. We also used the total value of hedge fund holdings as a tiebreaker in case the numbers of hedge fund holders were the same.
Best Dividend Stocks With Over 2% Yield
10. BlackRock, Inc. (NYSE:BLK)
Dividend Yield as of September 27: 3.37%
Number of Hedge Funds Holders: 50
Total Value of Hedge Fund Holdings: 1.56 billion
Based in New York, BlackRock, Inc. (NYSE:BLK) is a multinational investment management company, which focuses on asset management and provides risk management strategy. Given its earnings power and past earnings per share growth, BlackRock, Inc. (NYSE:BLK) has raised its dividend for 12 consecutive years. In the last five years, the company raised its dividends at a CAGR of 13.90%. As a result, it pays a quarterly dividend of $4.88 per share. As of September 27, BlackRock, Inc. (NYSE:BLK)’s stock also yields 3.37%.
Some analysts are also bullish on the firm’s prospects. On August 12, Deutsche Bank analyst Brian Bedell kept a Buy rating on BlackRock, Inc. (NYSE:BLK) stock and raised the price target to $860 from $720.
At the end of the second quarter, 50 hedge funds tracked by Insider Monkey owned stakes in BlackRock, Inc. (NYSE:BLK). The total value of these stakes is $1.56 billion. Harris Associates is the largest stakeholder in BlackRock, Inc. (NYSE:BLK) as of September, with a $549.93 million position in the company.
Alongside Wells Fargo & Company (NYSE:WFC), Bank of America Corporation (NYSE:BAC), and JPMorgan Chase & Co. (NYSE:JPM), BlackRock, Inc. (NYSE:BLK) is a dividend stock with a yield of over 2% that many hedge funds in our database own as of Q2 2022.
9. McDonald’s Corporation (NYSE:MCD)
Dividend Yield as of September 27: 2.33%
Number of Hedge Funds Holders: 50
Total Value of Hedge Fund Holdings: 2.30 billion
McDonald’s Corporation (NYSE:MCD) is a multinational fast food chain. Given its scale and the brand name, McDonald’s Corporation (NYSE:MCD) has been consistently profitable despite economic challenges. The company has raised its dividends consistently for the past 45 years and the stock currently offers a quarterly dividend of $1.38 per share. As of September 27, the company has a dividend yield of 2.33%.
Despite the Federal Reserve raising interest rates, some analysts are bullish on the stock. On September 7, Piper Sandler analyst Nicole Miller Regan kept an Overweight rating on the stock and raised the price target to $270.
At the end of Q2, 50 hedge funds in our database had a position in McDonald’s Corporation (NYSE:MCD). Our data shows that Bridgewater Associates is the biggest stakeholder of McDonald’s Corporation (NYSE:MCD), with almost 2.71 million shares worth $511.43 million.
8. Lowe’s Companies, Inc. (NYSE:LOW)
Dividend Yield as of September 27: 2.24%
Number of Hedge Funds Holders: 53
Total Value of Hedge Fund Holdings: 4.98 billion
Lowe’s Companies, Inc. (NYSE:LOW) is an American retail company specializing in home improvement.
Given its earnings growth, Lowe’s Companies, Inc. (NYSE:LOW) has raised its annual dividend for 48 consecutive years. As a result of the dividend increases, the company has a quarterly dividend of $1.05 per share, giving it a dividend yield of 2.24% as of September 27.
Although the economy could slow further, analysts expect Lowe’s Companies, Inc. (NYSE:LOW)’s earnings to continue to grow next year. The stock trades at a forward P/E ratio of 12.94 as of September 27.
53 hedge funds in Insider Monkey’s database had Lowe’s Companies, Inc. (NYSE:LOW) in a bullish position at the end of the second quarter of 2022. These hedge funds held shares in the firm worth about $4.98 billion. Pershing Square, with a position worth $1.78 billion, stood as the most significant shareholder of Lowe’s Companies, Inc. (NYSE:LOW).
Pershing Square Capital Management mentioned Lowe’s Companies, Inc. (NYSE:LOW) in its Q4 2021 investor letter. Here is what the firm has to say:
Lowe’s is a high-quality business with significant long-term earnings growth potential
Supportive macroeconomic backdrop
-Aging housing stock, lack of new inventory, robust home equity values, and unprecedented pro project backlog
-COVID-19 causing millennials to enter the housing marketPositioned to grow EPS largely independent of market conditions
-Idiosyncratic revenue opportunities driving share gains
-Self-help initiatives catalyzing operating margin expansion
-Buybacks representing ~8% of current market capitalization planned for 2022Multi-year business transformation with substantial earnings upside
-Margin target of 13% has substantial upside; Home Depot at ~15.3% and increasing
-Potential to generate high-teens EPS growth over the next several years.Lowe’s continues to trade at a significantly discounted P/E multiple relative to Home Depot despite materially higher prospective EPS growth. LOW’s share price including dividends increased 63% in 2021 and has decreased 10% year-to-date in 2022.
7. Lockheed Martin Corporation (NYSE:LMT)
Dividend Yield as of September 27: 2.8%
Number of Hedge Funds Holders: 55
Total Value of Hedge Fund Holdings: 2.56 billion
Based in America, Lockheed Martin Corporation (NYSE:LMT) is an aerospace company, which focuses on arms, defense, information and security technologies. Lockheed Martin Corporation (NYSE:LMT) is a giant in the industry. The company employs approximately 115,000 employees worldwide, including about 60,000 engineers and scientists.
Given its scale and the necessity of national security, Lockheed Martin Corporation (NYSE:LMT) has been consistently profitable despite economic challenges. The company has increased its dividend for 19 straight years and has a dividend yield of 2.8% as of September 27.
In August, Lockheed Martin Corporation (NYSE:LMT) was also awarded $121.57 million contract by the US Army.
The number of hedge funds tracked by Insider Monkey owning stakes in Lockheed Martin Corporation (NYSE:LMT) were 55 in Q2 2022. The collective value of these stakes was over $2.56 billion. GQG Partners, with a position worth $877.88 million, was the largest shareholder of Lockheed Martin Corporation (NYSE:LMT).
6. Union Pacific Corporation (NYSE:UNP)
Dividend Yield as of September 27: 2.64%
Number of Hedge Funds Holders: 65
Total Value of Hedge Fund Holdings: 6.36 billion
Headquartered in Nebraska, Union Pacific Corporation (NYSE:UNP) is a railroad holding company. Given its strong position in the transport sector, Union Pacific Corporation (NYSE:UNP) has both economies of scale and earnings power.
In the second fiscal quarter, Union Pacific Corporation (NYSE:UNP) reported a normalized EPS of $2.93, beating analyst estimates by $0.09. The company’s revenue in the second quarter came in at $6.27 billion, and beat revenue estimates by $170.15 million. As of September 27, the stock has a dividend yield of 2.64%.
Hedge funds appreciate the growth profile of Union Pacific Corporation (NYSE:UNP). 65 hedge funds in the database of Insider Monkey were long Union Pacific Corporation (NYSE:UNP) at the end of September with stakes worth $6.36 billion.
When looking at the institutional investors followed by Insider Monkey at the end of Q2, Fisher Asset Management, holds the biggest position in Union Pacific Corporation (NYSE:UNP). Fisher Asset Management has over a $1.12 billion position in the stock, comprising 0.79% of its 13F portfolio.
Like Union Pacific Corporation (NYSE:UNP), Wells Fargo & Company (NYSE:WFC), Bank of America Corporation (NYSE:BAC), and JPMorgan Chase & Co. (NYSE:JPM) are dividend stocks with a yield over 2% as of September 27 that many hedge funds in our database own as of Q2 2022.
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Disclosure: None. 10 Dividend Stocks With Over 2% Yield is originally published on Insider Monkey.
