In this article, we discuss 10 NASDAQ-100 stocks that pay dividends. If you want to see some more stocks in this list, click 5 NASDAQ-100 Stocks that Pay Dividends.
The Nasdaq 100 is a market index that is made up of the 100 biggest non-financial names trading on the Nasdaq stock exchange. The companies in the Nasdaq 100 Index are weighted according to their market capitalizations. Since 2003 to date, the Nasdaq 100 has delivered a compound annual growth rate of 21% in earnings, 13% in revenue, and 26% in dividend value, and it has repeatedly outperformed the S&P 500 Index, a competitive US equity benchmark.
The NASDAQ 100 closed at 16,320.08 points at the end of 2021, finishing approximately 4,000 points ahead of its closing value for the prior year. This solid performance was recorded despite the widespread economic consequences of the COVID-19 pandemic.
The Nasdaq-100 is heavily inclined towards industry-leading stocks from the technology, consumer services, and healthcare sectors. The long-term growth projections for companies from these industries remain solid despite the economic disruption from the COVID-19 pandemic and volatile macro backdrop that involves rampant inflation, the Russia-Ukraine war, the looming indicators of recession, and a rising rates environment. Since technology is influencing the world and making companies more efficient, there is a strong likelihood that the sector leads the stock market in the future despite recent market selloff.
With dividends as an effective hedge against inflation, and experts suggesting that investors should choose high quality names for their portfolios, Nasdaq-100 stocks like Microsoft Corporation (NASDAQ:MSFT), Costco Wholesale Corporation (NASDAQ:COST), and Apple Inc. (NASDAQ:AAPL) are some of the top dividend choices for portfolio diversification by institutional and retail investors alike.
Photo by Joshua Hoehne on Unsplash
Our Methodology
We selected the most prominent dividend payers from the NASDAQ-100 Index, ensuring that the shortlisted stocks had optimistic analyst ratings and strong hedge fund sentiment. We have mentioned the dividend yields for the companies as of April 25.
NASDAQ-100 Stocks that Pay Dividends
10. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 62
Dividend Yield as of April 25: 2.83%
Broadcom Inc. (NASDAQ:AVGO) was incorporated in 2018 and is headquartered in San Jose, California. The company manufactures semiconductor devices and infrastructure software products. Broadcom Inc. (NASDAQ:AVGO)’s dividend yield on April 25 stood at 2.83%.
On April 8, Truist analyst William Stein maintained a Buy recommendation on Broadcom Inc. (NASDAQ:AVGO) but lowered the firm’s price target on the shares to $657 from $686 as part of a broader research note on the semiconductor space. The analyst cited demand headwinds for the semiconductor industry in the near-term.
Broadcom Inc. (NASDAQ:AVGO) on April 1 priced its earlier offering of $750 million of 4.00% senior unsecured notes due 2029 and $1.2 billion of 4.15% senior unsecured notes due 2032. Net proceeds will be utilized to redeem in total the company’s 4.700% senior notes due 2025 and 4.250% senior notes due 2026, including accrued and unpaid interest.
Broadcom Inc. (NASDAQ:AVGO) declared on March 3 a $4.10 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on March 31. The company has a history of increasing dividends consecutively for the last 13 years.
Among the hedge funds tracked by Insider Monkey, 62 funds were bullish on Broadcom Inc. (NASDAQ:AVGO) at the end of December 2021, up from 50 funds in the preceding quarter. William Von Mueffling’s Cantillon Capital Management is a prominent stakeholder of the company, with more than 1 million shares worth $669.40 million.
In addition to Microsoft Corporation (NASDAQ:MSFT), Costco Wholesale Corporation (NASDAQ:COST), and Apple Inc. (NASDAQ:AAPL), elite hedge funds are pouring into Broadcom Inc. (NASDAQ:AVGO).
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about Broadcom Inc. (NASDAQ:AVGO) in its Q4 2021 investor letter:
“However, ClearBridge portfolio companies are responding by supporting their workforces and showing resilience in adapting and thriving. Semiconductor companies ClearBridge owns and engages with have been successful in advancing vaccinations in their global supply chains. In Malaysia, for example, Broadcom has taken part in PIKAS, a public-private partnership vaccination program focusing on the workforce in critical manufacturing sectors. By the summer of 2021 Broadcom was able to get over 90% of workers in its Penang factory at least one dose of vaccine, and roughly 73% fully vaccinated. Companies in the program also pay the administration cost for vaccinations including cases where the employee is no longer employed by the company before full immunization of the employee.”
9. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 56
Dividend Yield as of April 25: 1.16%
CSX Corporation (NASDAQ:CSX) is a Florida-based provider of railway freight transportation services. The company specializes in the transfer of intermodal containers and trailers, rail-to-truck transfers, and bulk commodity operations. On April 25, CSX Corporation (NASDAQ:CSX)’s dividend yield came in at 1.16%.
Argus analyst John Eade on April 22 maintained a Buy rating on CSX Corporation (NASDAQ:CSX) and raised the firm’s price target on the stock to $41 from $39. The analyst cited CSX Corporation (NASDAQ:CSX)’s Q1 earnings beat and recovering profits which should move upwards in 2022-2023, driven by pricing power. He also named CSX Corporation (NASDAQ:CSX) as a “critical link” in domestic supply chains.
CSX Corporation (NASDAQ:CSX) reported its Q1 2022 financial results on April 20, posting earnings per share of $0.39, beating market estimates by $0.02. The Q1 revenue climbed 21.33% year-over-year to $3.41 billion, outperforming analysts’ predictions by $106.57 million.
On February 16, CSX Corporation (NASDAQ:CSX) announced a $0.10 per share quarterly dividend, a 7.5% increase from its prior dividend of $0.093. The dividend was paid to shareholders of the company on March 15.
Among the hedge funds tracked by Insider Monkey, 56 funds were long CSX Corporation (NASDAQ:CSX) at the end of the fourth quarter of 2021, with combined stakes valued at $5.3 billion. Eric W. Mandelblatt’s Soroban Capital Partners is the leading shareholder of the company, with a position worth approximately $1.5 billion.
Here is what ClearBridge Investments Global Infrastructure Value Strategy has to say about CSX Corporation (NYSE:CSX) in its Q4 2021 investor letter:
“On a regional basis, the U.S. and Canada were the top contributors to quarterly performance, of which U.S. rail operator CSX was among the lead performers. CSX is one of five leading North American rail companies, with over 21,000 miles of rail, covering 23 states and 40+ ports. CSX is engaged in the transportation of rail freight in the Southeast, East, and Midwest via interchange with other rail carriers, to and from the rest of the U.S. and Canada. CSX performed well during the quarter after the company beat market expectations on its third-quarter results. The beats were largely driven by strong pricing, which could be hitting record highs, and healthy commodity/coal volume driven by the current energy crisis.”
8. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 53
Dividend Yield as of April 25: 1.64%
eBay Inc. (NASDAQ:EBAY) is a California-based company that operates an online marketplace where buyers and sellers from the United States and international markets can connect for the exchange of multiple types of goods. eBay Inc. (NASDAQ:EBAY)’s dividend yield as of April 25 came in at 1.64%.
eBay Inc. (NASDAQ:EBAY) started paying dividends in 2019, and the company has raised its payouts over the three years that dividends have been instated. On February 23, eBay Inc. (NASDAQ:EBAY) declared a $0.22 per share quarterly dividend, a 22.2% increase from its earlier dividend of $0.18. The dividend was paid to shareholders on March 18. The company also raised share repurchase authorization by an additional $4 billion.
On March 15, Deutsche Bank analyst Lee Horowitz initiated coverage of eBay Inc. (NASDAQ:EBAY) with a Buy rating and a $64 price target. The company’s position amid the “secular growth trends” associated with e-commerce and the “impressive executional focus” that has followed CEO Jamie Iannone’s arrival is underappreciated by the market, the analyst observed.
According to Insider Monkey’s Q4 data, 53 hedge funds were long eBay Inc. (NASDAQ:EBAY), up from 49 funds in the preceding quarter. The total stakes owned in the fourth quarter of 2021 amounted to $2.05 billion. Nicolai Tangen’s Ako Capital is the biggest eBay Inc. (NASDAQ:EBAY) shareholder, with a position worth approximately $328 million.
Here is what Steel City Capital had to say about eBay Inc. (NASDAQ:EBAY) in its Q4 2020 investor letter:
“eBay (Long): EBAY continues to be a core holding in the Partnership’s long book despite not having any “sexy” attributes or unknown catalysts. I like EBAY because it checks the boxes of being both capital light and priced as a value stock (low multiple of free cash flow), factors which are attractive in a potentially inflationary environment.
In 3Q’20 the company printed $2.6 billion of revenue vs. guidance of $2.4 billion (a $200 million beat) while full year revenue guidance was taken up by $400 million, implying 4Q’20 would be higher by $200 million as well. Free cash flow from continuing ops was guided to $2.3 billion for the full year, slightly above the $2.0 billion the business regularly generated before getting a Covid/stimulus related boost.
EBAY will have about $4.6 billion of cash on hand at year end5 and should receive another $2.0 billion in after-tax proceeds this quarter related to the sale of its Classifieds portfolio6. Additionally, the company will receive 540 million shares from Adevinta which are currently valued at ~$8.3 billion, and also holds a warrant to purchase a 5.0% stake in payment processor Adyen which was last valued at ~$775 million. Additional asset sales are also not out of the question7 . Backing everything out at today’s market cap of $38.2 billion gives a clean market cap for the core marketplace of $22.6 billion. At a minimum, I expect $2.0 billion of free cash flow in FY’21, with the potential for a higher figure to the extent the incoming administration is successful in cutting additional stimulus checks. By FY’22, free cash flow should ramp to $2.3 billion after incorporating a full year’s contribution from the managed payments initiative. This values EBAY at 9.6x free cash flow, or 11.7x excluding stock-based comp.”
7. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 51
Dividend Yield as of April 25: 2.06%
Honeywell International Inc. (NASDAQ:HON) is an American multinational conglomerate that operates via Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions segments. Honeywell International Inc. (NASDAQ:HON) announced on April 13 its commitment to further advance its sustainability goals beyond the company’s existing measures. The company aims to become carbon neutral in its facilities and operations by 2035.
Honeywell International Inc. (NASDAQ:HON) has a 12-year history of consistently raising its dividend payments. On April 25, Honeywell International Inc. (NASDAQ:HON) declared a $0.98 per share quarterly dividend, in line with previous. The dividend is payable on June 3, to shareholders of the company at the close of business on May 13. Honeywell International Inc. (NASDAQ:HON) delivers a dividend yield of 2.06%.
Deutsche Bank analyst Nicole DeBlase opened a “Catalyst Call: Buy” on Honeywell International Inc. (NASDAQ:HON) on April 14 as a short-term idea. The analyst continues to believe that Honeywell International Inc. (NASDAQ:HON) is positioned to benefit from its late-cycle end market exposures to aerospace, oil and gas, and non-residential construction. She views the company’s full year guidance as achievable, but lowered the price target on the stock from $243 to $240.
Among the hedge funds tracked by Insider Monkey in Q4 2021, 51 hedge funds were long Honeywell International Inc. (NASDAQ:HON), up from 45 funds in the prior quarter. D E Shaw is the largest shareholder of the company, with 1.6 million shares worth $342.4 million.
Here is what ClearBridge Investments has to say about Honeywell International Inc. (NASDAQ:HON) in its Q1 2021 investor letter:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included industrials, Honeywell also lagged in the quarter after previously generating strong returns over extended periods.”
6. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 82
Dividend Yield as of April 25: 0.62%
Intuit Inc. (NASDAQ:INTU) is a California-based company that specializes in enterprise-level personal finance, accounting, and taxation software. The company’s products include applications such as TurboTax, QuickBooks, Mint, Credit Karma, and Mailchimp.
Intuit Inc. (NASDAQ:INTU) has offered consistent dividend growth for the last 11 years. On March 3, the company declared a quarterly dividend of $0.68 per share, which was distributed to shareholders on April 18. Intuit Inc. (NASDAQ:INTU)’s dividend yield on April 25 came in at 0.62%.
On April 25, Wells Fargo analyst Michael Turrin maintained an Overweight rating on Intuit Inc. (NASDAQ:INTU) but lowered the firm’s price target on the shares to $635 from $725. As the tax season is over, TurboTax’s performance relative to expectations is a top concern for investors, especially since a few upcoming catalysts are likely to set the course for the company’s near-term performance, the analyst contended. Despite that, with the 31% pullback in shares year-to-date, increased diversification, and a profile he views as comparatively more defensive for software, the analyst suggested taking advantage of any post-tax season buying opportunity.
Elite hedge funds poured into Intuit Inc. (NASDAQ:INTU) in the December 2021 quarter. According to Insider Monkey’s Q4 data, 82 hedge funds were bullish on Intuit Inc. (NASDAQ:INTU), up from 64 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the largest shareholder of the company, with 3.73 million shares worth $2.40 billion.
Like Microsoft Corporation (NASDAQ:MSFT), Costco Wholesale Corporation (NASDAQ:COST), and Apple Inc. (NASDAQ:AAPL), Intuit Inc. (NASDAQ:INTU) is a notable NASDAQ-100 dividend payer.
Here is what Baron FinTech Fund has to say about Intuit Inc. (NASDAQ:INTU) in its Q4 2021 investor letter:
“Intuit Inc. is the leading provider of accounting and tax preparation software. Shares increased after the company reported quarterly results that beat Street estimates, with 22% revenue growth in the Small Business segment and record-high revenue from Credit Karma. The company closed the acquisition of MailChimp, which expands its product offering and is accretive to EPS. Management increased full-year guidance to reflect better organic growth and the contribution from MailChimp. We continue to own the stock due to Intuit’s strong competitive position and numerous growth opportunities. We have several investments in software companies that help businesses manage their financial processes and operations. Intuit Inc. provides accounting and payroll solutions for small businesses as well as tax preparation software for consumers and tax professionals.”
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Disclosure: None. 10 NASDAQ-100 Stocks that Pay Dividends is originally published on Insider Monkey.
