12 Best Diversified Dividend Stocks to Buy Now

Published on March 28, 2023 at 3:10 pm by Vardah Gill in Dividend Stocks, Hedge Funds, News

In this article, we discuss 12 diversified dividend stocks to buy now. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Best Diversified Dividend Stocks to Buy Now.

Diversified companies can provide investors with diversification across different industries and sectors, which can help reduce the risk of investing in a single industry or sector. In addition to this, by having multiple businesses, companies can generate revenue from different sources, which stabilizes their revenue streams. This can be particularly beneficial in times of economic uncertainty or when one industry or sector is facing challenges. Through multiple businesses, these companies often have strong balance sheets and solid cash flow generation even during volatile times.

After recording one of its worst performances in history last year, the stock market was on the road to recovery in 2023. However, the recent Silicon Valley Bank (SVB) collapse has shaken investors’ confidence in the stock market. A monthly survey conducted by BofA through its self-compiled ‘Financial Market Risk Indicator’ after the fallout of SVB showed that investor worry levels have risen to 7.7, just a little below extreme highs of last year amid the Ukraine War. This financial instability has made investors explore different investment options, with dividend strategies gaining traction over other asset classes.

According to analysts, companies with strong cash flow should be investors’ focus as they pay stable dividends to shareholders. Chris Senyek, chief investment strategist at Wolfe Research, spoke with Barron’s about dividend stocks and the importance of cash flow. He said:

“Many dividend payers have strong balance sheets and lower leverage, and the sustainability of the dividend isn’t in question unless we get a really deep downturn.”

He further added that investors should avoid companies with a lot of debt and turn their attention toward those who are able to smoothly cover their payouts by free cash flow.

PepsiCo, Inc. (NASDAQ:PEP), Merck & Co., Inc. (NYSE:MRK), and Exxon Mobil Corporation (NYSE:XOM) are some companies that have raised their payouts for a long period of time and have strong cash flow generation. Companies like these can provide a reliable source of income and can also help to mitigate the effects of market volatility. To know more about dividend stocks, readers can have a look at 13 Best Long Term Dividend Stocks to Buy Now.

With this in mind, we will discuss the diversified dividend stocks to buy now.

Image by Sergei Tokmakov Terms.Law from Pixabay

Our Methodology:

For this list, we selected conglomerate firms that specialize in several different businesses and pay regular dividends to shareholders. We gauged hedge fund sentiment for these stocks using Insider Monkey’s database of 943 hedge funds as of Q4 2022. The list is ranked in ascending order of the number of hedge funds having stakes in the companies.

Best Diversified Dividend Stocks to Buy Now

11. Unilever PLC (NYSE:UL)

Number of Hedge Fund Holders: 22

Unilever PLC (NYSE:UL) is a British multinational consumer goods company that specializes in a wide of products. On February 13, the company declared an 8.6% hike in its quarterly dividend to $0.457 per share. The stock has a dividend yield of 3.50%, as of March 28. The company can be added to dividend portfolios alongside some of the best dividend stocks like PepsiCo, Inc. (NASDAQ:PEP), Merck & Co., Inc. (NYSE:MRK), and Exxon Mobil Corporation (NYSE:XOM).

In FY22, Unilever PLC (NYSE:UL) reported revenue of €60 billion, which showed a 14.5% growth from the same period last year. The company’s free cash flow for the year amounted to over €5.2 billion, which was sufficient to pay its dividends worth over €4.3 billion.

At the end of Q4 2022, 22 hedge funds tracked by Insider Monkey reported having stakes in Unilever PLC (NYSE:UL), up from 21 in the previous quarter. The collective value of these stakes is roughly $776.5 million.

Fundsmith mentioned Unilever PLC (NYSE:UL) in its 2022 yearly investor letter. Here is what the firm has to say:

“Last year I wrote about Unilever PLC (NYSE:UL) and attracted a virtual tsunami of comment for my remarks about Unilever, purpose and Hellmann’s mayonnaise. Events soon overtook this commentary insofar as Nelson Peltz’s Trian Partners announced that it had bought a stake in Unilever and he was invited to join the board. We are asked to suspend disbelief that this was in no way linked to the subsequent announcement that Alan Jope will be leaving the CEO role. This explanation sounds like it was lifted from the script of Miracle on 34th Street.

As I have previously pointed out, our Fund has held Unilever shares since inception and was about the 12th largest shareholder when these events happened. Yet for the first eight years of our existence as a shareholder we did not hear from Unilever. The first contact was when we were asked to vote in favour of moving the headquarters and listing to the Netherlands. As I remarked at the time, it is not a good way to manage relationships to ignore people until you need their support…” (Click here to read the full text)

10. Emerson Electric Co. (NYSE:EMR)

Number of Hedge Fund Holders: 32

Emerson Electric Co. (NYSE:EMR) is a Missouri-based manufacturing company that specializes in products and services for industrial, commercial, and consumer markets. Morgan Stanley upgraded the stock to Overweight in March and also raised its price target on the stock to $96. The firm mentioned that the company’s fundamentals are accelerating.

Emerson Electric Co. (NYSE:EMR) currently pays a quarterly dividend of $0.52 per share and has a dividend yield of 2.48%, as of March 28. It is one of the best dividend stocks on our list as it has raised dividends for 66 years in a row.

As of the close of Q4 2022, 32 hedge funds tracked by Insider Monkey owned stakes in Emerson Electric Co. (NYSE:EMR), worth roughly $781 million collectively. Among these hedge funds, Two Sigma Advisors was the company’s leading stakeholder in Q4.

9. Church & Dwight Co., Inc. (NYSE:CHD)

Number of Hedge Fund Holders: 36

A New Jersey-based multinational company, Church & Dwight Co., Inc. (NYSE:CHD) is next on our list of the best dividend stocks to buy now. The company specializes in personal care, household, and other specialty products. Deutsche Bank presented a positive stance on the consumer staples industry and raised its price target on the stock to $92 in March, while maintaining a Buy rating on the shares.

Church & Dwight Co., Inc. (NYSE:CHD) has been making regular dividend payments to shareholders for 122 years. Moreover, the company holds a 27-year streak of consistent dividend growth. It currently offers a quarterly dividend of $0.2725 per share for a dividend yield of 1.26%, as of March 28.

At the end of December 2022, 36 hedge funds tracked by Insider Monkey owned stakes in Church & Dwight Co., Inc. (NYSE:CHD), with a total value of over $1.4 billion.

8. Corning Incorporated (NYSE:GLW)

Number of Hedge Fund Holders: 39

Corning Incorporated (NYSE:GLW) is an American multinational tech company that deals in specialty glass, ceramics, and other related materials. The company also specializes in technologies including advanced optics, for industrial and scientific applications. It currently pays a quarterly dividend of $0.38 per share. The company is one of the best dividend stocks on our list as it maintains a 10-year streak of consistent dividend growth. The stock’s dividend yield on March 28 came in at 3.35%.

In March, Deutsche Bank upgraded Corning Incorporated (NYSE:GLW) to Buy and also lifted its price target on the stock to $38. The firm appreciated the company’s growing revenue in its most recent quarter.

As of the end of the December quarter of 2022, 39 hedge funds in Insider Monkey’s database reported owning stakes in Corning Incorporated (NYSE:GLW), up from 38 in the previous quarter. These stakes have a consolidated value of $348.5 million. With over 2 million shares, Citadel Investment Group was the company’s leading stakeholder in Q4.

7. Carlisle Companies Incorporated (NYSE:CSL)

Number of Hedge Fund Holders: 41

Carlisle Companies Incorporated (NYSE:CSL) is an American diversified company, based in Arizona. The company manufactures and markets a wide range of products including optical fibers and defense electronics. BMO Capital maintained an Outperform rating on the stock in March with a $335 price target, highlighting the company’s long-term performance.

Carlisle Companies Incorporated (NYSE:CSL), one of the best dividend stocks, currently pays a quarterly dividend of $0.75 per share. The company has raised its dividends consistently for the past 46 years. As of March 28, the stock has a dividend yield of 1.37%.

At the end of December 2022, 41 hedge funds in Insider Monkey’s database owned stakes in Carlisle Companies Incorporated (NYSE:CSL), worth roughly $8 billion collectively.

Madison Funds mentioned Carlisle Companies Incorporated (NYSE:CSL) in its Q4 2022 investor letter. Here is what the firm has to say:

“The bottom five detractors for the quarter were Carlisle Companies Incorporated (NYSE:CSL), Brown & Brown, Brookfield, CarMax, and Armstrong World Industries. Following robust outperformance during the first three quarters of the year, Carlisle shares took a step back this quarter as investors worried about commercial roofing demand in a potentially slowing economy.”

6. Honeywell International Inc. (NASDAQ:HON)

Number of Hedge Fund Holders: 44

Honeywell International Inc. (NASDAQ:HON) is a North Carolina-based company that specializes in a wide range of products, including alarms, building controls, medical instruments, and space systems. In 2022, the company stretched its dividend growth streak to 13 years and currently pays a quarterly dividend of $1.03 per share. The stock has a dividend yield of 2.18%, as of March 28.

In addition to Honeywell International Inc. (NASDAQ:HON), investors also pay attention to some other best dividend stocks, including PepsiCo, Inc. (NASDAQ:PEP), Merck & Co., Inc. (NYSE:MRK), and Exxon Mobil Corporation (NYSE:XOM).

As per Insider Monkey’s Q4 2022 database, 44 hedge funds owned stakes in Honeywell International Inc. (NASDAQ:HON), with a total value of roughly $698 million. Diamond Hill Capital was the company’s leading stakeholder among these hedge funds.

Click to continue reading and see 5 Best Diversified Dividend Stocks to Buy Now.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on September 27, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

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Click to continue reading…

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