In this article we present the list of 12 Best Annual Dividend Stocks To Buy Now. Click to skip ahead and see the 5 Best Annual Dividend Stocks To Buy Now.
Cameco Corporation (NYSE:CCJ), News Corporation (NASDAQ:NWS), and CRH plc (NYSE:CRH) are some of the leading companies that pay dividends on either an annual or semi-annual basis.
Of the thousands of companies on the U.S. stock market that make dividend payments to shareholders, the vast majority do so either monthly or quarterly. In fact, there are so few companies that make dividend payments on an annual basis that we had to include a few companies that make semi-annual payments (which are slightly less rare, though still uncommon) to fill out our list.
More frequent dividend payout schedules can be advantageous for investors, allowing them to reinvest their payments sooner or giving them a steady flow of income. Some of the best dividend stocks on the market make less frequent payments though and shouldn’t be overlooked. If nothing else, stocks that make annual dividend payments are easier to trade in and out of if you’re just looking to stockpile dividend payments.
There are a number of reasons why a company may choose to make dividend payments less frequently. For some companies, the seasonality of their business model may dictate that the majority of their earnings are accrued during a small stretch of the year, which may incentivize them to make dividend payments during only those periods. In other cases, broader cash flow concerns may prompt a company to make less frequent payments so they can better manage short downturns in their income streams.
That’s not to say any of the following stocks aren’t necessarily safe dividend stocks. That all comes down to the company’s overall payout ratio and future cash flow projections, which we’ll dig into when analyzing each of them in turn. That said, several of them are smaller companies with less robust dividend payment histories and limited institutional support, so that’s worth considering before making any investment decision.
The following list of top annual dividend stocks includes all of the companies’ relevant dividend history, including payout rates, payout ratios, the latest changes to their dividend policies, and the schedule for their upcoming payments.
Image by Nattanan Kanchanaprat from Pixabay
Our Methodology
The following annual dividend stocks are ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q2 2022 reporting period.
12 Best Annual Dividend Stocks To Buy Now
12. IF Bancorp Inc (NASDAQ:IROQ)
Number of Hedge Fund Shareholders: 1
Annual Dividend Payout: $0.375
News Corporation (NASDAQ:NWS), Cameco Corporation (NYSE:CCJ), and CRH plc (NYSE:CRH) rank as some of the best annual dividend stocks to buy now. A compelling semi-annual dividend payer is IF Bancorp Inc (NASDAQ:IROQ), which has grown its dividend at a CAGR of 15.8% over the last five years, having more than doubled its annual payouts since 2017.
A bank holding company that manages the business activities of personal and commercial bank Iroquois Federal, IF Bancorp Inc (NASDAQ:IROQ) grew net income to $1.84 per diluted share in the company’s FY22 ended June 30, up from $1.74 a year earlier. Return on average equity jumped 73 basis points during the company’s fiscal Q4 to 7.07%. While it may not be able to sustain its current dividend growth rate longer-term, with a yield already above 2%, IROQ shares are an interesting under-the-radar dividend pick.
Just a lone hedge fund was long IF Bancorp Inc (NASDAQ:IROQ) on June 30, that being Jeffrey Gendell’s Tontine Asset Management, which owned 251,679 shares worth $4.78 million. In over ten years of tracking the stock’s hedge fund ownership, it’s never had less than one or more than two shareholders during any given quarter.
11. Cementos Pacasmayo S.A.A. (NYSE:CPAC)
Number of Hedge Fund Shareholders: 1
Annual Dividend Payout: $0.5276
Peruvian cement company Cementos Pacasmayo S.A.A. (NYSE:CPAC) has made an annual or special dividend payments over each of the last ten years. Its next payment is scheduled for December 12 with an ex-dividend date of November 11. The company’s dividend payout ratio is hovering above 90%, so the dividend is unlikely to go much higher from here, especially with analysts predicting the company’s EPS will fall by 13% to $0.34 next year. With a yield of nearly 10% though, its dividend doesn’t need continued growth to be a compelling micro-cap dividend play.
Cementos Pacasmayo S.A.A. (NYSE:CPAC) grew operating income by 7.6% in the September quarter, reaching just under $90 million. Revenue grew by just over 9% to $554 million, slightly outpacing the company’s cost of revenue, which rose by 8%.
There was also just a lone hedge fund long Cementos Pacasmayo S.A.A. (NYSE:CPAC) on June 30, Jim Simons’ quant fund Renaissance Technologies, which owned a paltry 12,464 shares, which it bought during the second quarter. Prior to that, there hadn’t been a fund long CPAC since the first quarter of 2018, which also happened to be Renaissance Technologies with a similarly small stake.
10. G. Willi-Food International Limited (NASDAQ:WILC)
Number of Hedge Fund Shareholders: 2
Annual Dividend Payout: $0.87
After making a single dividend payment last year, G. Willi-Food International Limited (NASDAQ:WILC) officially began making semi-annual payments this year, which totaled $0.87, giving WILC shares a yield of 6.43%. G. Willi-Food International Limited (NASDAQ:WILC) has become much more profitable in recent years, which has allowed the company to begin rewarding shareholders with payouts.
The Israel-based food products distributor rarely topped $0.50 in EPS between 2009 and 2018 and never earned more than 0.79 per share. It’s topped $1.00 in EPS over each of the last three years however, including $1.21 in 2020. It’s also had its two best years in terms of EBITDA over each of the last two years, pulling in $20 million and $18 million respectively.
The same two funds have been long G. Willi-Food International Limited (NASDAQ:WILC) dating back seven quarters: Jim Simon’s Renaissance Technologies and Brian Gaines’ Springhouse Capital Management. The latter has held a stake in the company since late 2015, while RenTech’s ownership stretches back to at least 2010.
9. Sasol Limited (NYSE:SSL)
Number of Hedge Fund Shareholders: 5
Annual Dividend Payout: $0.8578
After halting its semi-annual dividend payments in 2019, South African energy and chemicals company Sasol Limited (NYSE:SSL) relaunched an annual dividend this year, which paid out $0.8578 on September 23, giving shares a yield of close to 5%. The latest payout was well beneath the company’s historical annual payments, and could rise in the years to come.
Sasol Limited (NYSE:SSL)’s net income has quadrupled in the last year to $2.7 billion, which the company has primarily used to pay down its mountain of debt, which was partly incurred due to massive cost overruns in the building of its Lake Charles Chemicals Project in Louisiana. With that project complete and the company’s balance sheet rebounding, shareholders could be the big beneficiaries of all that net income in the years to come.
Hedge fund ownership of Sasol Limited (NYSE:SSL) has been cut in half since the end of 2020, with Donald Sussman’s Paloma Partners and Israel Englander’s Millennium Management among the funds to sell off SSL during that time. Peter Rathjens, Bruce Clark, and John Campbell’s Arrowstreet Capital owns the largest position in Sasol as of June 30, holding 2.25 million shares.
8. Shenandoah Telecommunications Company (NASDAQ:SHEN)
Number of Hedge Fund Shareholders: 6
Annual Dividend Payout: $0.08
Shenandoah Telecommunications Company (NASDAQ:SHEN) slashed its annual dividend payments from $0.34 to $0.07 last year after the telecommunications company sold off its wireless assets and operations to T-Mobile US, Inc. (NASDAQ:TMUS) for $1.95 billion as it shifts to a fiber-first strategy. $937 million of that windfall was distributed to shareholders through a special dividend last year.
Shenandoah Telecommunications Company (NASDAQ:SHEN) shareholders won’t have the benefit of such a special payout this year however, though the annual dividend was hiked ever so slightly to $0.08. The company, which operates in six U.S. states, had grown revenue by nearly 18% over the past five years, but will now operate with a narrower focus that the company believes will pay off in the long-term. Q2 revenue was $66 million, topping estimates, while the company registered a $0.06 loss per share in earnings.
Hedge funds have been bailing on Shenandoah Telecommunications Company (NASDAQ:SHEN) in droves in recent years, with ownership of the stock falling by 70% since the middle of 2019. Ken Griffin’s Citadel Investment owns 250,979 shares of SHEN as of June 30 after selling off 57% of its holding during Q2.
7. RELX PLC (NYSE:RELX)
Number of Hedge Fund Shareholders: 9
Annual Dividend Payout: $0.6245
RELX PLC (NYSE:RELX) makes semi-annual variable dividend payments, which amounted to $0.6255 since this year, down from $0.6673 last year. The shares of the British analytics company have a solid dividend yield of 2.29% and the company has made dividend payments for 13 consecutive years.
RELX PLC (NYSE:RELX) announced in earlier this month that it expects its FY22 profit to be above historical trends thanks to strong performances from its risk, scientific, technical & medical business, but particularly from its exhibitions business, which had an 85% year-over-year boost in underlying revenue growth thanks to live events recovering from pandemic restrictions. RELX’s net income grew by 14.6% in the June quarter.
RELX PLC (NYSE:RELX) is sitting at an all-time high in hedge fund ownership, with more than double the amount of funds being long the company on June 30 as there were five quarters earlier. Paul Tudor Jones’ Tudor Investment Corp and Israel Englander’s Millennium Management are two prominent funds that have built stakes in RELX in recent quarters.
6. National Western Life Group Inc. (NASDAQ:NWLI)
Number of Hedge Fund Shareholders: 12
Annual Dividend Payout: $0.36
The first part of the list is closed out by National Western Life Group Inc. (NASDAQ:NWLI), which has a remarkable, if somewhat auspicious track record of annual dividend payments. The company has made the same $0.36 annual payment to its shareholders every year since 2006. Unfortunately for the company’s long-term shareholders, the stock itself has seen about the same amount of share price growth during that 17-year span, being down by 4.3% since the end of 2005.
National Western Life Group Inc. (NASDAQ:NWLI), which is the parent company of an insurance company which itself is the parent company of another insurance company (yes, things can and have gotten even weirder on the NWLI front), delivered consolidated net earnings of $18.93 per diluted Class A share during the first half of 2022, down from $31.68 a year earlier. The company had consolidated total assets of $13.3 billion as of June 30.
There was a big jump in hedge fund ownership of National Western Life Group Inc. (NASDAQ:NWLI) during the third quarter of 2021 and ownership of the stock has remained at elevated positions in the quarters since. Paul J. Isaac’s Arbiter Partners Capital Management owns the most bullish NWLI stake among the funds tracked by our database, having 2.37% 13F exposure to the stock through owning 18,824 shares.
CRH plc (NYSE:CRH), News Corporation (NASDAQ:NWS), and Cameco Corporation (NYSE:CCJ) are some higher profile annual dividend stocks for investors to consider, check them out at the link below.
Click to continue reading and see the 5 Best Annual Dividend Stocks To Buy Now.
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Disclosure: None. 12 Best Annual Dividend Stocks To Buy Now is originally published at Insider Monkey.
