In this article, we are going to discuss the 12 best Fortune 500 dividend stocks to buy right now.
Compiled and published by Fortune Magazine, the Fortune 500 is an annual list that ranks the biggest US companies by revenue. In total, the Fortune 500 companies represent two-thirds of the US GDP with $18.8 trillion in revenues, $1.7 trillion in profits, and $43 trillion in market value (as of March 28, 2024), and they employ a workforce of 31 million around the globe.
READ ALSO: 15 Best NASDAQ Dividend Stocks to Buy
2024 proved to be a big year for large-cap stocks, as the broader US market achieved gains of nearly 25%, piggybacking on a 26% performance the year before. Large-cap stock funds, with the heaviest tilt toward growth stocks, performed the best last year, even as the market’s rally somewhat broadened from the handful of mega tech companies that have led much of the bull market.
However, the tailwinds that propelled the market to new heights are beginning to recede, as the rate of monetary policy easing slows down, long-term interests swing upward, inflation becomes sticky, and the US economy is slowing down. Moreover, the upcoming presidency of Donald Trump and his much-rumored tariffs could also herald a more volatile period for markets, as they could further fan inflation fears and put pressure on stock prices.
That said, the expected upcoming fluctuation isn’t going to be something that the mega corporations haven’t dealt with before. A 2023 report by J. P. Morgan revealed that despite the considerable volatility during the period, large-cap stocks gained around 162% between 2013 and 2023, galvanized primarily by big tech. Another 2023 report by CNBC unveiled that large US companies outperformed other investments between 2003 and 2023, with average returns of 9.3%. However, it hasn’t always been a smooth ride, as despite the stability and reliability large-cap stocks are known for, investors had to survive drops of 56.8% during the 2007-2009 bear market, 33.9% in 2020, and 25.4% in 2022.
In addition to the few tech giants regularly making headlines with their gains, large-cap dividend stocks could also be an attractive option for investors looking for a reliable, significant, and growing stream of income. According to Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, the broader US large caps are expected to post an 8% increase in dividend payments in 2025, compared to the 6.4% uptick in 2024, 5.1% gains in 2023, and the 10.8% increase witnessed in 2022.
Large-cap companies tend to have more robust balance sheets compared to their smaller counterparts, enabling them to navigate through market fluctuations more smoothly while also returning value to their shareholders. Corporations in the US have continuously grown their considerable cash stockpiles since the beginning of the pandemic, thanks to the economic resilience we have witnessed recently. A report from treasury advisory firm Carfang Group revealed that as of Q1 2024, US corporations increased their cash holdings to an all-time high of $4.11 trillion, up 12.6% from the same period in 2024 and $1.28 trillion more from their pre-pandemic levels.
With that said, here are the Best Large-Cap Dividend Stocks to Invest In.
Methodology:
To collect data for this article, we referred to the top 50 companies among the Fortune Global Rankings. Then, we picked out 12 US-listed companies with the highest dividend yields as of January 13, 2025, and ranked them by their number of hedge fund investors according to the Insider Monkey database as of Q3 2024.
Following are the Best Large Cap Dividend Stocks to Buy Now.
At Insider Monkey we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 36
Dividend Yield: 6.22%
Market Cap: $38.09 billion
One of the largest and most iconic car companies in America, Ford Motor Company (NYSE:F) engages in the manufacture, distribution, and sale of automobiles.
Ford Motor Company (NYSE:F) had a strong 2024 as it reported sales of 2.08 million vehicles in the US, up 4.2% from just under 2 million in 2023. The company’s electric vehicles witnessed a significant surge in demand in the country, hitting a record 285,291 units and up 38% YoY, outselling GM and Stellantis’ electrified vehicles for the full year. As a result, electrified vehicles, including hybrids and EVs, represented 13.7% of Ford’s total annual sales in the US in 2024.
With a 4.2% increase in annual vehicle sales in the US market, Ford outpaced the overall automobile industry in the country, which witnessed a sales increase of only 2% in 2024. Moreover, the company’s F-Series again bagged the accolade of America’s best-selling truck for the 48th straight year.
Ford Motor Company (NYSE:F)’s electric vehicle strategy is a critical component of its future growth plans. The company is hoping to make its EV portfolio profitable this year and has already managed to reduce $1 billion in its EV costs by the end of Q3 2024. Moreover, Ford has also launched its Power Promise Program to offer complimentary home charging and installation to its customers.
Ford Motor Company (NYSE:F) operates in more than 125 countries and its extensive global footprint is a key strength. Over the last few years, the company has restructured its operations in Europe, South America, India, and China. Collectively, in 2018, those regions were losing $2.2 billion and burned $3.4 billion in cash for the company. Now, after Ford’s restructuring efforts, all of those regions are collectively profitable.
Ford Motor Company (NYSE:F)’s financial position remains strong and the company boasted almost $28 billion in cash and $46 billion in liquidity at the end of Q3 2024. The company reported $3.2 billion in adjusted free cash flow during the quarter with a target to return 40-50% of it to its shareholders. It must be noted that Ford has paid out over $10 billion to its shareholders since the beginning of 2022.
11. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 38
Dividend Yield: 5.86%
Market Cap: $68.1 billion
BP p.l.c. (NYSE:BP) is a British multinational company operating in all areas of the oil and gas industry, including exploration and extraction, refining, distribution and marketing, power generation, and trading.
Another new area of focus for BP p.l.c. (NYSE:BP) is hydrogen. In order to produce clean fuels and reduce greenhouse emissions, the company intends to grow its hydrogen business by investing in five to ten projects worldwide. It aims to produce 500,000 to 700,000 tons of low-carbon hydrogen annually by 2030. It was recently announced that BP has made the final investment decision for its 100 MW Linden Green Hydrogen project, expected to produce up to 11,000 tons of green hydrogen annually.
BP p.l.c. (NYSE:BP)’s charging business is also a step towards energy transition and the segment seems to be doing well. By the end of Q3 2024, the company’s EV business had witnessed a staggering growth of 80% YoY and cumulatively by the end of Q3 2024, BP had already achieved the milestone of 1 terawatt hour of electrons sold to its customers around the globe.
BP p.l.c. (NYSE:BP) is targeting to grow its oil and gas output through the end of the decade while also continuing to make high-grade investments in low-carbon and renewables. The company announced earlier this month that it has successfully started gas production from the GTA Phase 1 project, one of Africa’s deepest and most complex gas developments. The energy firm has also pledged to increase oil production by 44% and gas output by 89% from India’s largest field, with full-scale visibility anticipated by 2027-28.
However, the slump in crude prices and lower refining margins weighing down the oil and gas sector have also taken a toll on BP p.l.c. (NYSE:BP). The company reported its weakest quarterly earnings in nearly four years in Q3 of 2024, with $2.3 billion in underlying profit, down 30% YoY. Despite the tough situation, BP remains focused on returning value to its shareholders and announced another $1.75 billion share buyback and a dividend per ordinary share of $0.08 at the end of the third quarter of 2024.
10. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 48
Dividend Yield: 4.24%
Market Cap: $197 billion
Shell plc (NYSE:SHEL) is one of the largest oil and gas companies in the world, operating through the following segments: Integrated Gas, Upstream, Downstream, and Corporate.
Shell plc (NYSE:SHEL) is also transitioning towards a low-carbon future and announced last year that it would invest $10-15 billion into low-carbon energy solutions by 2026. However, the company has come under fire after its Q3 2024 investments in renewable energy fell to 8% of its overall capital expenditure, down from 9% in the previous quarter. Shell is also stepping back from new offshore wind investments and is splitting its power division following an extensive review of the business that was once seen as a major driver of the oil major’s energy transition strategy. The decline in green energy investments comes after the oil major weakened its 2030 carbon emissions reduction target in March last year.
However, Shell plc (NYSE:SHEL)’s investments in its traditional fossil fuels business continue and the company announced recently that it has started production at its offshore Whale floating facility located in the Gulf of Mexico, further enhancing its portfolio in the region. Moreover, it was also recently announced that Shell and Norway’s Equinor are to combine their UK offshore oil and gas assets and expertise to form a new company which will be the UK North Sea’s biggest independent producer.
Shell plc (NYSE:SHEL) is also the top global lubricant supplier and number one globally in liquified natural gas (LNG), a sector that is expected to grow substantially over the coming decade. However, the company recently trimmed its LNG production outlook for the fourth quarter of 2024 and warned that trading in its gas and chemicals divisions would be ‘significantly lower’ than in Q3. Moreover, Shell plc (NYSE:SHEL) is also poised to take a non-cash, post-tax impairment of between $800 million and $1.2 billion on its renewables business (linked to European and North American assets) in Q4 2024.
Despite the tough macroeconomic situation faced by the oil and gas industry, Shell plc (NYSE:SHEL) announced at the end of Q3 2024 that it would buy back a further $3.5 billion of its shares until the end of 2024 while holding its dividend unchanged at $0.34 per share. This marked the 12th consecutive quarter that the oil and gas giant had announced at least $3 billion in buybacks.
Shell plc (NYSE:SHEL) has also been included in our list of the 10 Best FTSE Dividend Stocks to Buy Now.
9. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 59
Dividend Yield: 5.12%
Market Cap: $154.7 billion
Next on our list of the Best Large Cap Dividend Stocks is AT&T Inc. (NYSE:T), an American telecommunications, media, and technology services company that provides a wide range of services to its consumers. The telecommunications giant has been the largest capital investor in the US connectivity infrastructure since 2019.
AT&T Inc. (NYSE:T)’s stock has surged by more than 31% over the last year, thanks to its fast-improving fundamentals such as increased gross margin and reduced debt. Moreover, the company announced at the end of Q3 2024 that it is selling its remaining 70% stake in DirecTV to private equity firm TPG, generating a lot of cash that can be used to pay down debt and reward shareholders. AT&T Inc. (NYSE:T)’s robust balance sheet, escalating share price, and high dividend yield make it a very attractive option for investors looking for a passive income stock.
AT&T Inc. (NYSE:T) is also continuing its focus on being a leader in 5G and fiber connectivity throughout America, with plans to extend its fiber internet network to over 50 million locations by 2029, up from about 28 million today. The company is also growing its 5G subscribers in a durable way and delivered 403,000 postpaid phone net adds in Q3 of 2024.
AT&T Inc. (NYSE:T) maintains an annual cash dividend of $1.11 per share and has even authorized a $20 billion share repurchase program that it expects to complete by the end of 2027. In all, the company plans to return more than $40 billion to its shareholders through dividends and share repurchases over the next three years.
TCW Funds stated the following about AT&T Inc. (NYSE:T) in its Q3 2024 investor letter:
“AT&T Inc. (NYSE:T), based in Dallas, TX, is a nationwide provider of voice, video, and data communications services to businesses and consumers in the wired, wireless, and broadband. At initiation, the stock had a $141 billion market capitalization and met all five valuation factors with an above market dividend yield of 5.6%. From a sustainability prism, the company completed its commitment to invest $2 billion by the end of 2023 to help bridge the digital divide. AT&T is working on enabling low-income households to access to low-cost broadband services through its Access service plan as well as reaching out to more rural communities and Tribal lands where internet access remains a challenge. It is nearly 85% the way to providing one million people in need with digital resources through AT&T Connected Learning® with the goal to be reached by the end of 2025. In 2020, the company announced that it is committed to be carbon neutral by 2035 with zero carbon emission across all operations. It is deploying Smart Climate Solutions – through efforts like its Connected Climate Initiative – that will help enable its business customers to reduce their emissions as well. The company’s goal is to help collectively reduce its emissions by one billion metric tons – a gigaton – by 2035, compared to 2018 levels. The primary catalysts are new/strong management and restructuring. John Stankey was appointed CEO in July 2020 and he is committed to refocusing the company and improving its financial performance. The company combined its WarnerMedia operation with Discovery during 1Q:22 which eliminated AT&T’s exposure to the rapidly evolving media industry and refocused its core telecommunication business thus eliminating a major drag on profitability and the company’s balance sheet by reducing long-term debt from a peak $176 billion during 2020 to $142 billion at the end of June 2024 quarter. AT&T is moving aggressively to reduce cost and sell non-core assets such as its advertising platform Xander to Microsoft† which was accomplished during 2022. The company has redesigned its network to be software driven structure reducing the capital investment cycle in its national network – resulting in a network that is flexible with unrivaled speed and reliability – thus enhancing its nationwide position. By the end of 2023, it expanded its 5G network to reach more than 302 million people in nearly 24,500 cities and towns in the U.S. The company’s mid-band 5G+ network alone grew to cover more than 210 million people. AT&T is one of the largest investors in digital infrastructure in the U.S. Over the five years ending 2023, the company invested nearly $150 billion primarily in its wireless, fiber optics, and wireline networks. The extensive restructuring and refocusing of AT&T on its core business should result in improved earnings and cash flow while at the same time reducing uncertainty for shareholders.”
8. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 63
Dividend Yield: 5.54%
Market Cap: $64.9 billion
America’s leading health solutions company, CVS Health Corporation (NYSE:CVS) provides advanced health care from pharmacy services and health plans to health and wellness. The company operates under three segments namely Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness. The idea is for CVS stores to become a one-stop shop and bring all the many parts of the healthcare chain under one roof.
CVS Health Corporation (NYSE:CVS)’s Q3 2024 reports reflect its efforts to adapt to a changing healthcare landscape. Despite significant headwinds, the company managed to increase its quarterly revenue to $95.4 billion, up 6.3% YoY and beating the analysts’ estimates by $2.74 billion. The results reflect strong performance in its Health Services and Pharmacy & Consumer Wellness segments, but the healthcare benefits business remains challenged as a consequence of continued elevated levels of utilization. As a result, CVS’ Q3 2024 operating income decreased 77.5% YoY, primarily due to a decline in the Health Care Benefits segment and restructuring charges of approximately $1.2 billion recorded in the current year.
CVS Health Corporation (NYSE:CVS) is also expected to benefit from the recent proposal of the Biden administration to significantly raise the amount that the government pays to insurers who offer Medicare Advantage plans. The Centers for Medicare & Medicaid Services intends to increase its payments to insurers that offer Medicare Advantage plans by an average of 4.3%, or over $21 billion, in 2026 compared to this year.
CVS Health Corporation (NYSE:CVS)’s stock price has surged by over 14% YTD but has declined by more than 33% since a year ago. The primary reason for this stock value erosion is the company’s Pharmacy and Consumer Wellness division, as the expected synergy from aggregating this segment to the health businesses is yet to bear fruit. The adjusted operating income of this business has plummeted from $7.26 billion in 2021 to an expected $5.70-5.75 billion in 2024. The front store revenue is expected to fall by 6.2% while the online segment continues to face tough competition from leading players like Amazon.
CVS Health Corporation (NYSE:CVS) maintained a strong cash position at the end of Q3 2024, with $6.9 billion in cash and cash equivalents. The company has consistently paid dividends to shareholders since 1997 and announced a quarterly dividend per share of $0.665 this month.
CVS Health Corporation (NYSE:CVS) ranks among the 10 Best January Dividend Stocks to Buy.
7. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 63
Dividend Yield: 4.26%
Market Cap: $281.5 billion
Chevron Corporation (NYSE:CVX) manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives. The company owns five US fuel refineries and also boasts a network of Chevron and Texaco service stations.
In Q3 of 2024, Chevron Corporation (NYSE:CVX) reported revenue of $50.67 billion, surpassing analysts’ expectations by $1.63 billion, despite the outages and maintenance at several locations. The company also generated $9.7 billion in operating cash flow, up from $6.3 billion in the prior quarter. Additionally, it returned $7.7 billion to shareholders through dividends and share buybacks during the quarter. Chevron Corporation’s (NYSE:CVX) dividend growth streak spans over 37 years, placing it on our list of the Dogs of the Dow Dividend Stocks to Invest In.
Chevron Corporation (NYSE:CVX)’s Q3 2024 worldwide production increased by 7% from the prior year and set a third-quarter record. The company continues to see strong performance in the Permian, executing major turnarounds at TCO and Gorgon ahead of schedule. These projects, combined with additional project startups through 2025, are expected to grow the oil giant’s Gulf of Mexico production to 300,000 barrels per day by 2026.
Chevron Corporation (NYSE:CVX) also remains focused on strengthening its balance sheet further by divesting its non-core positions at significant value. The company has announced asset sales in Canada, Alaska, and Congo, which will contribute before-tax proceeds of approximately $8 billion pending regulatory approvals. The company is also saving cash by optimizing and improving its capital efficiency. Chevron has reduced its capital expenditure budget from around $40 billion a decade ago to around $15 billion in 2025, reflecting its commitment to spending rationalization. The company’s focus on boosting its free cash flow could result in higher returns for its shareholders, making it an attractive option for investors looking for stable income in the energy industry.
63 hedge funds tracked by IM held a stake in Chevron Corporation (NYSE:CVX) at the end of Q3 2024, with Warren Buffett’s Berkshire Hathaway holding the largest stake worth nearly $17.5 billion.
6. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 66
Dividend Yield: 2.01%
Market Cap: $79 billion
The Cigna Group (NYSE:CI) is an American healthcare and insurance company, boasting more than 178 million customer relationships in over 30 countries and jurisdictions worldwide. With Cigna Healthcare and Evernorth Health Services as its two primary segments, the company has adopted a diversified business model and established itself as a leader in commercial insurance markets and pharmacy services, with specialty pharmacy being its particularly strong suit.
Despite the headwinds faced by the American health insurance sector, The Cigna Group (NYSE:CI) posted strong results in Q3 2024. The company reported a revenue of $63.7 billion, up almost 30% YoY and beating the analysts’ estimates by over $4.1 billion. The impressive uptick was primarily driven by significant growth in Evernorth Health Services, reflecting large client wins and strong specialty volume growth. Cigna’s total customer relationships rose by 12% compared to December 31, 2023, reaching 183.5 million, while its total pharmacy customers also grew by 22% to 120 million.
The Cigna Group (NYSE:CI) recently put the rumors of its highly speculated acquisition of Humana to rest and said that it was focused on buying back its shares. The company had already repurchased about $5.7 billion worth of its common stock in the first ten months of 2024, with $715 million in the month of October alone. The health insurance company also stated that it expects additional share repurchases in the fourth quarter, demonstrating its confidence in the strength and sustainable growth of its business. It is worth noting that Cigna has repurchased about $24 billion of its stock in the last four years. The firm also declared a quarterly dividend of $1.4 per share in October and has been growing its dividends for four consecutive years.
The Cigna Group (NYSE:CI) has recently come under public scrutiny after revelations by the US Federal Trade Commission that the country’s largest pharmacy benefit managers (including Cigna) have significantly marked up the prices of certain medicines, including for HIV, cancer and heart disease, at their affiliated pharmacies. However, a company spokesperson has described these findings as misleading, saying the calculations are based on a subset of medications that represent less than 2% of what its health plans spend on medications annually.
5. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 82
Dividend Yield: 2.31%
Market Cap: $403.4 billion
Coming in at number 5 on our list of the Best Large Cap Dividend Stocks is The Home Depot, Inc. (NYSE:HD), the largest home improvement specialty retailer in the world, engaging in the sale of building materials and home improvement products. The company boasts over 2,300 stores in the US, Canada, and Mexico.
The housing market in the US has recently been under pressure due to the rising interest rates, elevating mortgage rates, and inflationary pressures on consumers in recent years. However, the recent decline in interest rates should provide some much-needed support. The stock price of The Home Depot, Inc. (NYSE:HD) also surged by 3.38% on the 15th of January after the core Consumer Price Index (CPI) was lower than expected for December. The falling inflation is good for the economy in general and should significantly benefit Home Depot.
The home improvement industry is large and fragmented, valued at around $1 trillion annually. The Home Depot, Inc. (NYSE:HD), despite being the largest player in the sector, commands a market share of only 15%. This means that the industry behemoth still has plenty of space to take share from smaller retailers that can’t match it in brand recognition, inventory availability, or omnichannel capabilities.
Although The Home Depot, Inc. (NYSE:HD) has struggled recently largely due to macroeconomic factors, its 60% payout ratio could be attractive for investors. The company maintains a strong cash position, generating more than $15 billion in operating cash flow for the first nine months of 2024. Home Depot announced a quarterly dividend of $2.25 per share in November and has increased dividends every year since 2010.
Carillon Tower Advisers made the following comment about HD in its Q3 2024 investor letter:
“While Home Depot, Inc.’s (NYSE:HD) recent reported earnings were somewhat tepid, the market seems to be pricing in an inversion of the company’s sales, driven by lower interest rates. Home Depot reported its seventh consecutive quarter of same-store sales declines, giving back substantial gains that it enjoyed during the pandemic. High mortgage rates have also put a damper on existing home sales. People typically spend the most on home repairs and improvements in years when they buy or sell houses, often conducting both transactions in the same year.”
4. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Dividend Yield: 3.72%
Market Cap: $490.1 billion
Exxon Mobil Corporation (NYSE:XOM) is one of the largest publicly traded energy providers and chemical manufacturers in the world. The company engages in the exploration for, and production of, crude oil and natural gas, as well as the manufacture, trade, and transportation of crude oil, natural gas, petroleum products, and petrochemicals. With operations in more than 60 countries around the globe, the oil giant gains a significant competitive edge due to its diversified world-class asset portfolio.
Though it is hands-down one of the leaders of the global fossil fuel sector, Exxon Mobil Corporation (NYSE:XOM) is also ramping up its investments in lower-carbon energy. The company recently unveiled its 2030 vision, a significant aspect of which is the pursuit of up to $30 billion of low emissions opportunities in the 2025 to 2030 timeframe. The oil major recently secured the largest offshore carbon dioxide storage site in the US through an agreement with the Texas General Land Office. Moreover, Exxon is working on what would be the biggest low-carbon hydrogen production facility in the world, with the capacity to produce up to 1 billion cubic feet of hydrogen per day.
In May 2024, Exxon Mobil Corporation (NYSE:XOM) announced the acquisition of Pioneer Natural Resources in a $59.5 billion all-stock deal, the largest deal in the energy sector in the last 8 years. The acquisition, which was a strategic move from the oil giant to bolster its presence in the Permian Basin, has already started to bear fruit as Exxon has used it to offset the effect of the decline in average oil prices during the quarter, registering the first impact of the new asset.
In Q3 of 2024, Exxon Mobil Corporation (NYSE:XOM) increased its production to 4.6 million oil-equivalent barrels per day, up 24% YoY. Q3 was Exxon’s first full quarter with Pioneer, which added 770,000 oil-equivalent barrels per day of highly advantaged production. The company is also improving the profitability of the barrels it produces and has doubled its unit earnings per oil-equivalent barrel from $5 in 2019 to $10 in the first nine months of 2024.
Exxon Mobil Corporation (NYSE:XOM) also reported a strong financial position in Q3 2024, achieving an operating cash flow of $17.6 billion, with its free cash flow at $11.3 billion. The company returned $26.1 billion to its shareholders in the form of dividends and share repurchases during the quarter, with plans to repurchase over $19 billion of shares by the end of 2024. Moreover, Exxon has increased its annual dividend for 42 consecutive years and announced a quarterly dividend of $0.99 in November.
With 86 elite money managers tracked by IM holding a stake in the company at the end of Q3 2024, Exxon Mobil Corporation (NYSE:XOM) is placed among the Top 12 Oil and Gas Stocks To Invest In According to Hedge Funds.
3. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 88
Dividend Yield: 3.14%
Market Cap: $135 billion
Citigroup Inc. (NYSE:C) is an American multinational investment bank and financial services company with operations in nearly 180 countries and jurisdictions. Citigroup is going through a multi-year transformation, divesting complex business units and focusing on areas where they can at least earn the cost of capital. Over the last three years, the company has made significant strides in areas such as risk management, compliance, and accountability. The stock has outperformed the market in the past 12 months, surging by over 54%, which places it on our list of the best large cap stocks.
Citigroup Inc. (NYSE:C)’s strategic focus on its Services business is bearing fruit, and in Q3 2024, the segment delivered a record quarter with revenues up by 8%. The company is taking advantage of its extensive global network to address cross-border financial needs, aiming for growth in a segment that accounted for 23% of its overall revenue in 2023. Citigroup is also the first global bank to complete the integration of its cross-border services with Mastercard Move, a step that will ultimately enable near-instant secure payments to the vast Mastercard debit network, starting with 14 markets with more to come early next year.
Citigroup Inc. (NYSE:C) had a strong Q3 2024, as it delivered revenue growth and positive operating leverage across all five of its businesses, reflecting the growing diversity of its earnings mix. The company reported an overall revenue of $20.32 billion, up 0.9% YoY and beating the analysts’ estimates by $500 million. Notably, Citigroup’s expenses were also down 2% YoY during the quarter, largely driven by savings associated with its organizational simplification and stranded cost reductions.
Citigroup Inc. (NYSE:C) is a reliable dividend payer and returned $2.1 billion in the form of common dividends and share repurchases in the third quarter of 2024, reflecting the company’s confidence in its financial stability and its ability to generate excess capital even while investing in its transformation initiatives. The company declared a quarterly dividend of $0.56 per share in October and has never missed a dividend payment in over 34 years.
2. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 98
Dividend Yield: 2.32%
Market Cap: $344.5 billion
Bank of America Corporation (NYSE:BAC) ranks second on our list of the best large cap stocks. It is one of the world’s largest financial institutions, serving individuals, small- and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services.
In Q3 of 2024, Bank of America Corporation (NYSE:BAC) generated $25.5 billion in revenue and earned $6.9 billion in net income after tax, driven by investment banking and trading. The bank’s Investment banking fees jumped 18% YoY to $1.4 billion as increasing confidence among clients spurred them to issue more debt and equity.
Bank of America Corporation (NYSE:BAC) launched its consumer investments business in 2010 and investments from its retail consumers have already swelled to more than $500 billion in assets at the end of 2024. The company is expecting the trend to continue and is aiming to cross the $1 trillion mark in the business in five years. What’s more is that nearly 33% of BAC’s consumer investment accounts are held by Gen Z and millennial clients, who have become more active in investing.
Bank of America Corporation (NYSE:BAC)’s strong deposit base is considered a significant strength in the current high-interest rate environment. The bank’s extensive branch system and robust digital presence enable it to expand its low-cost deposit base and attract new customers. The lender plans to open 165 more branches in the US by the end of 2026, which is expected to boost its investment assets even further.
Bank of America Corporation (NYSE:BAC) has paid and raised its dividend for 11 consecutive years, and maintained a dividend yield of 2.32% as of January 13, 2025. Analysts estimate that the bank will grow earnings by an average of 10% annually for the next three to five years, which could translate to significant dividend increases, making Bank of America Corporation (NYSE:BAC) a solid dividend growth stock in the long term.
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 105
Dividend Yield: 2.08%
Market Cap: $710.4 billion
Topping our list of the Best Large Cap Dividend Stocks to Invest In is JPMorgan Chase & Co. (NYSE:JPM), a leader in investment banking, commercial banking, financial transaction processing, and asset management. With assets of $3.9 trillion and clients in over 100 countries worldwide, the company’s extensive reach and diversification have been a key factor in its ability to navigate challenging market conditions.
JPMorgan Chase & Co. (NYSE:JPM) showed strong performance in 2024, reporting its biggest-ever annual profit of $58.5 billion, up 18% from 2023. The increase in earnings is primarily attributed to the financial institution’s dealmakers and traders reaping a windfall from rebounding markets in the fourth quarter. However, the bank’s net interest income (NII) fell 3% to $23.5 billion in Q4 2024, marking the first YoY decline since 2021.
JPMorgan Chase & Co. (NYSE:JPM)’s continued focus on investment banking and wealth management has been instrumental, as evidenced by the significant growth in these areas. The company’s revenue from investment banking fees jumped by 49% YoY in Q4 2024, highlighting strong client activity. JPM’s Asset & Wealth Management division also witnessed a 25% uptick in net income, reaching $1.5 billion, supported by asset under management growth driven by record client inflows. Following the impressive results in 2024, JPMorgan Chase & Co. (NYSE:JPM) closed at an all-time high of $252.35 on January 15th, having gained over 50% in the last year alone.
JPMorgan Chase & Co. (NYSE:JPM) is also an avid dividend payer and cumulatively paid a common dividend of $3.5 billion, or $1.25 per share, in Q4 2024. The company was also included in our list of the Top Dividend Stocks of 2024.
Overall JPM ranks first on our list of the best large-cap dividend stocks to buy now. While we acknowledge the potential for JPM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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