In this article, we will take a look at some of the best dividend-paying stocks according to hedge funds.
Dividend-paying stocks have consistently attracted investor interest due to their long-term value. CNBC highlights this by examining the historical performance of the broader market. Between 1960 and 2024, a $10,000 investment in the index would have grown to over $982,000 purely from stock price appreciation, based on data from FactSet and NYU Stern. However, many companies in the index also returned capital to shareholders through dividends. Had an investor reinvested those dividends over the years, the investment would have ballooned to approximately $6.42 million by the beginning of 2025.
This outlook seems reasonable, especially when considering how crucial cash flow has become in today’s economic environment. Investors continue to favor income-generating assets, and dividends remain one of the most reliable ways to deliver that income. Reflecting this trend, several companies within the market have recently introduced dividend payments.
According to S&P Global, companies in the S&P index now contribute roughly 85% of the total dividends paid across the market—up from 82% in 2024. This increase includes 2.7% of the total dividend pool coming from firms that only recently began issuing dividends. The top 29 companies in the index alone are responsible for 40% of all dividends paid by the index’s constituents and 35% of the total dividends across the entire US equity market. Under the current base-case forecast, these leading firms are expected to distribute a combined $280 billion in dividends. In a more optimistic (upside) scenario, that figure could climb by 2.75% to $288 billion, with major large cap companies projected to deliver the most significant gains by weighted average. If the most favorable (bull-case) conditions materialize, these 29 companies could boost total dividend payouts by an estimated 4.5%, contributing an additional 1% themselves.
It’s no surprise, then, that dividends have become a central theme in many investors’ strategies. According to Brian Bollinger, founder of Simply Safe Dividends, focusing on companies that regularly pay dividends can offer a sense of reassurance. He further noted that younger investors, in particular, have the opportunity to build long-term dividend growth portfolios aimed at maximizing total return and capital appreciation over time.
According to Nuveen, companies that focus on dividend growth tend to possess strong long-term fundamentals and may deliver relatively attractive performance in the year ahead. Historically, firms that consistently increased or initiated dividend payments have produced higher annualized returns and exhibited lower volatility compared to the broader equity market. While such companies may not lead in every market environment, their favorable risk-adjusted returns over extended periods make them a solid foundation for equity portfolios.
Nuveen also suggested that many firms remain in a strong position to continue raising dividends over time. In the US, corporate balance sheets are generally healthy, consumer spending remains steady, and earnings growth is projected to pick up pace in 2025. Data from FactSet shows that dividends per share for the S&P index rose by 7.6% in 2024, with consensus forecasts pointing to a further 4.2% increase in 2025. Given this, we will take a look at some of the best dividend stocks to buy according to hedge funds.
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Our Methodology
For this list, we scanned Insider Monkey’s database of over 1,000 hedge funds, as of the close of Q4 2024. From the top 60 companies, we selected 11 dividend stocks with yields of at least 1% as of April 12. These companies show strong financial performance and have solid records of paying dividends. The stocks are ranked according to the number of hedge funds having stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 92
Pfizer Inc. (NYSE:PFE) is an American multinational pharmaceutical and biotech company that offers a wide range of related products and services to its consumers. Recently, President Donald Trump has vowed to impose tariffs on the pharmaceutical sector, despite temporarily halting many of his broader trade levies for 90 days. During a recent industry event, Pfizer’s CEO, Albert Bourla, emphasized that the company operates the largest US-based manufacturing network in the pharmaceutical sector, with 13 active sites. Many of these facilities are equipped to produce high-demand, blockbuster medications at scale—an advantage Bourla believes positions the company well, even if trade tariffs remain in place.
Pfizer Inc. (NYSE:PFE) has also been ramping up its presence in oncology, underscored by its $43 billion acquisition of Seagen to expand its cancer treatment offerings. The company anticipates significant growth in this area over the next five years, aiming to double the number of patients it serves by 2030. It also plans to roll out at least three blockbuster cancer therapies, each expected to generate over $1 billion annually. This momentum is already taking shape, as oncology revenue climbed 25% in 2024.
Pfizer Inc. (NYSE:PFE) is a strong dividend payer with a long history of distributing dividends to shareholders. The company offers a quarterly dividend of $0.43 per share, having raised it by 2.4% in December 2024. This was the company’s 15th consecutive year of dividend growth, which makes PFE one of the best dividend paying stocks on our list. The stock offers an attractive dividend yield of 7.85%, as of April 12.
10. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 93
Union Pacific Corporation (NYSE:UNP) is a Nebraska-based railroad holding company that transports a wide range of goods and commodities, providing exposure to multiple industries, including agriculture, automotive, and energy. The company runs an extensive rail network spanning 32,693 miles across 23 US states and multiple international border crossings.
In the fourth quarter of 2024, Union Pacific Corporation (NYSE:UNP) reported a revenue of $6.12 billion, showing a modest 1% dip from the previous year. However, a 5% increase in revenue carloads helped offset part of the decline. The railroad operator also improved its operating ratio to 58.7%—a 220-basis-point improvement—even after factoring in a 70-basis-point impact from a newly ratified crew staffing agreement. Operating income rose 5% to reach $2.5 billion.
Union Pacific Corporation (NYSE:UNP) has a long-standing track record of shareholder returns, having paid dividends without interruption for 125 years and raised its payouts for 18 straight years. In fiscal 2024, the company produced over $9.3 billion in operating cash flow and closed the quarter with more than $1 billion in cash and equivalents. Currently, it pays a quarterly dividend of $1.34 per share and has a dividend yield of 2.45%, as of April 13.
9. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 96
Wells Fargo & Company (NYSE:WFC) ranks ninth on our list of the best dividend-paying stocks. The company holds a significant position in the banking industry, with a broad presence across consumer banking, corporate and investment banking, as well as wealth and investment management. Lately, the company has focused on improving its digital platforms and growing its range of services for retail clients. Its performance is largely supported by strong regulatory compliance, prudent management of capital and liquidity, and continuous progress in technology.
In the first quarter of 2025, Wells Fargo & Company (NYSE:WFC) reported revenue of $20.1 billion, down from $20.8 billion in the same period last year. The revenue also missed analyst estimates by $610 million. However, its net income of over $4.9 billion grew from $4.6 billion in the prior-year period.
Wells Fargo & Company (NYSE:WFC) demonstrates sound financial stability through its Common Equity Tier 1 (CET1) ratio of 11.1%, reflecting solid capital and liquidity management. Its strong cash position has enabled it to maintain its dividends since 1988. The company’s quarterly dividend comes in at $0.40 per share for a dividend yield of 2.56%, as of April 12.
8. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 98
Johnson & Johnson (NYSE:JNJ) is a New Jersey-based healthcare company that specializes in manufacturing, developing, and selling a wide range of healthcare products and also offers related services. The company’s core pharmaceutical business remains unaffected by current tariffs for now, but its latest attempt to resolve talc-related lawsuits through bankruptcy was rejected by a judge. The company now plans to defend itself through the tort system, as courts have ruled the lawsuits don’t pose financial distress.
While it would have been ideal to resolve its legal challenges, Johnson & Johnson (NYSE:JNJ) continues to demonstrate exceptional financial strength and operational stability. Its pharmaceutical and MedTech divisions remain robust, supported by consistent earnings and a strong pipeline that regularly delivers new product approvals. With over a century of innovation behind it, the company is expected to maintain its momentum. The stock has surged by over 5% since the start of 2025, outperforming the broader market.
In Q4 2024, Johnson & Johnson (NYSE:JNJ) reported $22.5 billion in revenue, reflecting a 5.2% year-over-year increase and surpassing expectations by $84.4 million. Operational growth reached 6.7%, while the MedTech segment posted a 6.2% rise in global operational sales, aided by acquisitions and divestitures.
Johnson & Johnson (NYSE:JNJ) also maintains a 62-year streak of dividend growth, which makes it one of the best dividend-paying stocks on our list. It currently pays a quarterly dividend of $1.24 per share and has a dividend yield of 3.27%, as of April 12.
7. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 102
Philip Morris International Inc. (NYSE:PM) is an American multinational tobacco company. Amid growing trade tensions, persistent inflation, and a resurgence of economic nationalism, investors are increasingly turning to companies that can withstand broader market pressures. Philip Morris stands out in this environment, as it relies largely on local supply chains in its major markets, reducing its exposure to global disruptions. Tobacco remains a resilient product due to its addictive and habitual nature, and even as the company pushes forward with its smoke-free IQOS offerings, it continues to demonstrate strong pricing power and stability. Unlike many firms affected by tariffs, interest rate hikes, and fiscal concerns, PM remains well-positioned regardless of macroeconomic headwinds. The stock is generating strong returns in 2025, surging by over 27% so far.
In Q4 2024, Philip Morris International Inc. (NYSE:PM) delivered solid performance, with revenue climbing 7.3% year-over-year to $9.7 billion and operating income rising 14.8% to $3.3 billion. The company’s transformation continues to gain momentum, as shipments of heated tobacco and oral nicotine products surpassed 40 billion units in a single quarter for the first time.
On March 6, Philip Morris International Inc. (NYSE:PM) declared a quarterly dividend of $1.35 per share, which was in line with its previous dividend. Overall, the company has been growing its dividends for 15 consecutive years, which makes PM one of the best dividend-paying stocks on our list. As of April 12, the stock has a dividend yield of 3.5%.
6. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 104
An American multinational oil and gas company, Exxon Mobil Corporation (NYSE:XOM) is a global leader in integrated energy and chemical operations, ranks at the top of the best oil and gas dividend stocks to consider. In Q4 2024, the company reported a revenue of $83.4 billion, reflecting a slight 1.1% dip from the previous year. Despite this, its long-term performance remained steady, supported by $12.1 billion in structural cost savings since 2019. These efforts have helped offset inflation and expansion costs while enabling it to outperform industry peers. For 2024, the company recorded a sector-leading return on capital employed at 12.7%, with a five-year average of 10.8%.
With a strong cash flow position, Exxon Mobil Corporation (NYSE:XOM) stands out as a reliable dividend payer. It generated $55 billion in operating cash flow during 2024, marking its third-strongest year in the past decade. For Q4 alone, operating cash flow reached $12.2 billion, while free cash flow totaled $8 billion. The company returned $36 billion to shareholders in 2024, including $16.7 billion in dividend payments.
Exxon Mobil Corporation (NYSE:XOM) boasts a rich dividend legacy, having paid shareholders for 143 consecutive years and growing its dividend consistently for the past 42 years. Currently, it pays a quarterly dividend of $0.99 per share and has a dividend yield of 3.84%, as of April 12.
5. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 105
Oracle Corporation (NYSE:ORCL) ranks fifth on our list of the best dividend-paying stocks according to hedge funds. The Texas-based multinational computer technology company develops and markets software applications, including its flagship Oracle Database. In fiscal Q3 2025, the company posted a revenue of $14.13 billion, marking a 6.4% increase from the previous year. Its cloud business, which includes Infrastructure as a Service (IaaS) and Software as a Service (SaaS), brought in $6.2 billion—up 23% year-over-year in US dollars. Notably, IaaS revenue alone surged 49% to $2.7 billion.
Oracle Corporation (NYSE:ORCL) has formed cloud partnerships with top tech names like OpenAI, xAI, Meta, NVIDIA, and AMD. Backed by a hefty $130 billion sales backlog, Oracle expects to achieve 15% total revenue growth in the upcoming fiscal year starting June.
Oracle Corporation (NYSE:ORCL) also delivered strong cash generation, reporting $20.7 billion in operating cash flow and $5.8 billion in free cash flow over the past 12 months. It finished the quarter with $17.4 billion in cash and equivalents. On March 10, the company announced a 25% increase to its quarterly dividend, raising it to $0.50 per share. Having consistently paid dividends since 2009, Oracle continues to rank among the most reliable dividend stocks. The stock supports a dividend yield of 1.51%, as of April 12.
4. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 113
Bank of America Corporation (NYSE:BAC) is an American financial services company. It generates revenue from a broad range of segments, including retail banking, wealth management, and investment banking. Even amid recent market fluctuations, Bank of America (NYSE:BAC) continues to show solid fundamentals. Its current share price may offer a compelling opportunity for investors looking for long-term growth and financial stability.
Bank of America Corporation (NYSE:BAC) has maintained solid financial performance over the years, consistently remaining profitable. Its average net profit margin over the last five years stands at 27.9%, reflecting its ability to withstand different market environments. In Q4 2024, the bank’s net income surged to $6.7 billion—more than double the $3.1 billion it earned a year earlier. In addition, it continued to grow its retail presence, opening 213,000 new consumer checking accounts and marking its 24th consecutive quarter of growth in this area.
Bank of America Corporation (NYSE:BAC), one of the best dividend-paying stocks, distributed approximately $2 billion to shareholders through dividends in the most recent quarter in an effort to return value to shareholders. Moreover, the company has been growing its payouts for 11 consecutive years and has paid regular dividends for 27 years in a row. Currently, it pays a quarterly dividend of $0.26 per share and has a dividend yield of 2.89%, as of April 12.
3. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 123
An American multinational financial services and banking company, JPMorgan Chase & Co. (NYSE:JPM) ranks third on our list of the best dividend-paying stocks according to hedge funds. The company operates across multiple key sectors of the financial industry. It owns a major bank that caters to both consumers and businesses, runs an investment banking division that assists companies in raising capital, and manages a wealth management arm that oversees investments for high-net-worth clients. Except for insurance, these operations cover all major areas of the finance sector.
In the fourth quarter of 2024, JPMorgan Chase & Co. (NYSE:JPM) delivered strong financial results, with net income surging 50% to $14 billion and net revenue climbing 10% to $43.7 billion. Although net interest income dipped 3% to $23.5 billion, noninterest revenue saw a notable 29% jump, reaching $20.3 billion. Operating expenses declined 7% to $22.8 billion, but when adjusted for the prior year’s $2.9 billion FDIC special assessment, they actually rose 5%, reflecting increased spending on compensation, brokerage fees, and technology. The bank also set aside $2.6 billion for credit losses, with net charge-offs rising to $2.4 billion, mainly due to higher losses in its Card Services division.
JPMorgan Chase & Co. (NYSE:JPM) offers a quarterly dividend of $1.40 per share, having raised it by 12% in March. In addition to dividend growth, it also returned $3.5 billion to shareholders through dividends in the most recent quarter. The stock supports a dividend yield of 2.37%, as of April 12.
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 150
UnitedHealth Group Incorporated (NYSE:UNH) is an American health insurance company. It is well-positioned for steady growth thanks to its broad-based business model, which spans health insurance, pharmacy benefit management, and healthcare services. This integrated setup not only enhances care efficiency but also boosts cross-selling opportunities. The stock is returning strong returns this year, surging by nearly 19% since the start of 2025.
Analysts have praised the company’s ability to trim its operating cost ratio, which dropped to 13.2% in 2024 from 14.7% the previous year, largely due to strategic adjustments in its business portfolio—moves that support long-term profitability.
In fiscal 2024, UnitedHealth Group Incorporated (NYSE:UNH) surpassed investor expectations, with revenue climbing 8% to $400 billion, supported by solid performance across all service areas. Operating earnings came in at $32.3 billion, and after accounting for expenses tied to a cyberattack and difficulties in South America, adjusted earnings totaled $34.4 billion.
UnitedHealth Group Incorporated (NYSE:UNH) also maintained robust cash flow, generating $24.2 billion in operating cash flow, equivalent to 1.6 times its net income. It returned more than $16 billion to shareholders via dividends and share repurchases. The company’s return on equity reached 23.7% in the fourth quarter, reflecting both strong earnings and effective capital allocation. UnitedHealth paid a quarterly dividend of $2.10 per share, yielding 1.40%, as of April 12. The company has consistently paid dividends since 2010.
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.
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