11 Best Dividend Paying Stocks to Buy According to Hedge Funds

1. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 161

Broadcom Inc. (NASDAQ:AVGO) is an American semiconductor company that offers a wide range of related services to its consumers. The stock took a hit recently following news from the White House that the actual tariff rate on China stood at 145%—much higher than the already steep figure President Trump had mentioned on social media. Still, markets bounced back with strong momentum on April 11, helping Broadcom’s stock climb as part of the broader recovery rally. Even with those gains, Broadcom shares remain down about 22% for the year. The stock currently trades at roughly 27 times projected earnings for 2025.

In fiscal Q1 2025, Broadcom Inc. (NASDAQ:AVGO) reported $14.9 billion in revenue, a 24.7% jump from the same period last year and $325.2 million above analyst estimates. The growth was fueled by a strong demand for its AI-related chips and infrastructure software. AI revenue climbed 77% year-over-year to $4.1 billion, while infrastructure software sales rose 47% to $6.7 billion.

Broadcom Inc. (NASDAQ:AVGO) also maintained solid financial health, generating over $6.1 billion in operating cash flow and more than $6 billion in free cash flow—about 40% of its total revenue. It returned $2.77 billion to shareholders through dividends in the quarter and currently pays a quarterly dividend of $0.59 per share. The stock supports a dividend yield of 1.30%, as of April 12.

Overall, Broadcom Inc. (NASDAQ:AVGO) ranks first on our list of the best dividend paying stocks according to hedge funds. While we acknowledge the potential of AVGO as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than AVGO but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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