In this article, we discuss 12 best performing dividend stocks in 2023. You can skip our detailed analysis of dividend stocks and their performance in the past, and go directly to read 5 Best Performing Dividend Stocks in 2023.
Market sentiment is a dynamic and ever-shifting phenomenon where the focus of investment frequently shifts from one type to another over time. While the technology-focused NASDAQ has posted a year-to-date gain of 21.2%, it has experienced a recent decline, losing 3.81% of its value over the past month. This demonstrates the ever-changing nature of the investment landscape. For this reason, investors tend to prefer dividend-paying companies because these firms have a reputation for producing consistent earnings, even when the economy experiences slower growth. In addition to this, companies that increase their dividends have shown better performance than the overall S&P 500 index historically, offering reliable income growth across different market sizes and industry sectors. These qualities are always attractive but become especially valuable during turbulent market conditions.
Also read: Dividend Capture Strategy: 10 High Yield Stocks To Buy in November
Dan Lefkovitz, a strategist for Morningstar Indexes, spoke about dividend stocks and their underperformance this year in one of his columns. Here are some comments from the analyst:
“Overall, dividend performance this year has been lackluster. The great thing about dividend investing is that it’s got a great track record. Plus, investors get paid while they wait for performance to turn around.”
Dividends have made up about a third of the market’s returns since 1960. However, it is important to note that not all dividend investment methods are the same, and there are key distinctions between those aiming for high dividend yields and those focusing on dividend growth. In the past, stocks that consistently increase their dividends have proven to be strong performers in terms of providing reliable income, especially during periods of high market volatility. According to a report by ProShares, in 2008, the S&P 500 experienced a significant decline of 37%, whereas the Dividend Aristocrats, companies known for consistently increasing their dividends, saw a comparatively smaller loss of 21.9%. This outperformance can be attributed to the competitive edge, cautious management, and dependable dividend payments of these companies.
Given the preference of investors for dividend-paying stocks because of their capacity to generate income, numerous companies around the world have chosen to maintain their dividend payouts at a consistent level. According to data from fund manager Janus Henderson, approximately 88% of companies worldwide either raised or maintained their dividend payments during the second quarter of 2023. This trend has led to a total of $568.1 billion in dividends distributed globally since the beginning of the year. The report also mentioned that in the US, 98% of the tracked companies either increased their dividends or maintained them at existing levels, surpassing the global average.
Despite an overall decline in the performance of dividend stocks this year, NVIDIA Corporation (NASDAQ:NVDA), General Electric Company (NYSE:GE), and Eli Lilly and Company (NYSE:LLY) are some of the best-performing dividend stocks this year, generating positive returns for shareholders. In this article, we will discuss some other best-performing dividend stocks in 2023.
Our Methodology:
For this list, we looked at the top-performing stocks of 2023 and focused on dividend-paying stocks that have shown significant growth in their share prices this year. We began with a pool of fifty companies, narrowed it down by considering their share price increases, and ultimately selected the top 12 dividend stocks with the highest share price gains as of October 27, arranging them in ascending order of performance.
12. Oracle Corporation (NYSE:ORCL)
Year-to-Date Returns as of October 27: 19.92%
Number of Hedge Fund Holders: 84
Oracle Corporation (NYSE:ORCL) is a Texas-based multinational technology company known for providing a wide range of software and cloud-based services. On September 11, the company announced a quarterly dividend of $0.40 per share, which was in line with its previous dividend. The company has been raising its dividends consistently for the past eight years. The stock’s dividend yield on October 27 came in at 1.59%. Since the start of 2023, ORCL has delivered a 19.92% return to shareholders, which makes it one of the best-performing stocks this year.
The number of hedge funds tracked by Insider Monkey holding stakes in Oracle Corporation (NYSE:ORCL) jumped to 84 in Q2 2023, from 67 in the preceding quarter. The overall value of these stakes is over $3.4 billion.
Harris Associates mentioned Oracle Corporation (NYSE:ORCL) in its Q3 2023 investor letter. Here is what the firm has to say:
“Oracle Corporation (NYSE:ORCL) (U.S.), a global software company, was the Fund’s top contributor for the fiscal year, with its share price rising primarily after reporting its fiscal fourth-quarter results. More recently, Oracle announced fiscal first-quarter results, which were in line with consensus expectations. The drivers of the core business are performing well, in our view, and management expressed confidence that annual revenue growth will accelerate as planned based on demand trajectory and its strong bookings trends. For the quarter, total revenue increased 8% in constant currency (9% reported), and operating income grew 12% with margins showing improvement. Cloud and support revenue grew 11% in constant currency, powered by Fusion +20% and Netsuite +21%. The “strategic back office cloud” is now up to $6.9 billion in run-rate revenue. Infrastructure cloud and support revenue grew 14% in constant currency, powered by infrastructure cloud services +72% ex-legacy hosting services to $5.6 billion in run-rate revenue. Momentum is continuing to build as Oracle signed several deals for its cloud business greater than $1 billion in total value during the quarter and booked an additional $1.5 billion in the first week of the second quarter. We continue to believe Oracle is an attractive holding and undervalued due to our perception of its intrinsic value.”
11. Parker-Hannifin Corporation (NYSE:PH)
Year-to-Date Returns as of October 27: 26.8%
Number of Hedge Fund Holders: 41
Parker-Hannifin Corporation (NYSE:PH) is a global industrial company that specializes in motion and control technologies. The company provides a wide range of products and systems designed to control and manage motion and fluid in various industries. It currently pays a quarterly dividend of $1.48 per share and has a dividend yield of 1.60%, as reported on October 27. The company is a Dividend King with 66 consecutive years of dividend growth under its belt.
At the end of Q2 2023, 41 hedge funds in Insider Monkey’s database reported having stakes in Parker-Hannifin Corporation (NYSE:PH), compared with 49 in the previous quarter. The consolidated value of these stakes is over $565.8 million. With over 2.2 million shares, Harris Associates was the company’s leading stakeholder in Q2.
10. FedEx Corporation (NYSE:FDX)
Year-to-Date Returns as of October 27: 28.3%
Number of Hedge Fund Holders: 62
FedEx Corporation (NYSE:FDX) is next on our list of the best-performing dividend stocks in 2023. The stock has gained 28.3% year-to-date, as of October 27. The company specializes in courier delivery services and logistics and also provides a wide range of transportation, e-commerce, and business services to customers around the world.
FedEx Corporation (NYSE:FDX) currently pays a quarterly dividend of $1.26 per share, having raised it by 10% in April this year. The company has raised its dividends for 3 years in a row. As of October 27, the stock has a dividend yield of 2.21%.
FedEx Corporation (NYSE:FDX) was a part of 62 hedge fund portfolios at the end of Q2 2023, up from 55 in the previous quarter, according to our database. The stakes owned by these hedge funds have a collective value of nearly $2.5 billion.
9. Pentair plc (NYSE:PNR)
Year-to-Date Returns as of October 27: 29.1%
Number of Hedge Fund Holders: 33
Pentair plc (NYSE:PNR) is an American multinational company that specializes in providing water solutions and services. The company’s products and technologies are designed to help manage, filter, and treat water in various applications. The stock has delivered a 29.1% return to shareholders this year so far.
Pentair plc (NYSE:PNR) has been raising its dividends consistently for the past 47 years and currently pays a quarterly dividend of $0.22 per share. The stock’s dividend yield on October 27 came in at 1.51%.
As of the end of Q2 2023, 33 hedge funds in Insider Monkey’s database owned stakes in Pentair plc (NYSE:PNR), compared with 34 a quarter earlier. These stakes have a consolidated value of over $1.55 billion. With roughly 11 million shares, Impax Asset Management was the company’s leading stakeholder in Q2.
8. Apple Inc. (NASDAQ:AAPL)
Year-to-Date Returns as of October 27: 33.4%
Number of Hedge Fund Holders: 135
An American multinational tech company, Apple Inc. (NASDAQ:AAPL) has gained 33.4% year-to-date, becoming one of the best-performing stocks in 2023. The company has been rewarding shareholders with growing dividends for the past 11 years and pays a quarterly dividend of $0.24 per share. The stock has a dividend yield of 0.58%, as of October 24.
Of the 910 hedge funds in Insider Monkey’s database at the end of Q2 2023, 135 funds owned stakes in Apple Inc. (NASDAQ:AAPL), up from 131 in the previous quarter. Their collective stake value is more than $194 billion. Warren Buffett’s Berkshire Hathaway owned the largest stake in the company in Q2.
7. Applied Materials, Inc. (NASDAQ:AMAT)
Year-to-Date Returns as of October 27: 35.2%
Number of Hedge Fund Holders: 72
Applied Materials, Inc. (NASDAQ:AMAT) is an American company that operates in the semiconductor manufacturing and technology industry. The company offers a quarterly dividend of $0.32 per share and has a dividend yield of 0.98%, as of October 27. It has been rewarding shareholders with growing dividends for the past six years. With a year-to-date return of 35.2%, AMAT is one of the best-performing stocks on our list.
At the end of June 2023, 72 hedge funds tracked by Insider Monkey owned investments in Applied Materials, Inc. (NASDAQ:AMAT), worth collectively over $5.2 billion. The largest stakeholder of the company at the end of the quarter was Generation Investment Management.
6. Microsoft Corporation (NASDAQ:MSFT)
Year-to-Date Returns as of October 27: 36.8%
Number of Hedge Fund Holders: 300
Microsoft Corporation (NASDAQ:MSFT) ranks sixth on our list of the best-performing stocks in 2023. The stock has gained 36.8% since the start of this year and its 12-month return came in at 44.6%. The company pays a per-share dividend of $0.75 every quarter, growing it by 10% in September this year. Through this increase, the company took its dividend growth streak to 17 years. As of October 27, the stock has a dividend yield of 0.91%.
According to Insider Monkey’s database of Q2 2023, Microsoft Corporation (NASDAQ:MSFT) was the most popular stock among hedge funds with 300 funds owning stakes in the company. These stakes have a collective value of nearly $70 billion.
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Disclosure. None. 12 Best Performing Dividend Stocks in 2023 is originally published on Insider Monkey.
