In this article, we will discuss some of the best dividend stocks for reliable income.
The year 2024 proved favorable for dividends, even though the Dividend Aristocrats Index lagged behind the broader market. Throughout the year, US companies consistently increased or upheld their dividend payouts. In addition, several major tech firms began offering dividends, signaling to investors that it’s possible for a company to focus on both growth and shareholder returns. By September 30, 2024, approximately 80% of the companies in the S&P index were distributing dividends, a figure that has remained fairly stable over the past decade. Notably, nearly 24% of these dividend-paying firms were in the technology sector, a significant increase from 13% ten years ago. Sectors such as healthcare and industrials also experienced notable growth in the number of companies offering dividends. This broader distribution of dividends has expanded the range of investment opportunities, giving equity-income investors more access to high-growth, dynamic, and innovative companies. Given these developments, analysts remain optimistic about their performance heading into 2025.
Also read: 10 Best Canadian Dividend Stocks to Buy For Income Investors
Analysts note that, from a broad perspective, earnings growth has traditionally been the primary driver of dividends. Last year saw strong earnings growth, and they anticipate an even better performance in 2025. Goldman predicts an 11% increase in earnings per share for this year, up from an estimated 8% in 2024. This is expected to result in a 7% rise in dividends, compared to a 6% increase last year. Ohsung Kwon, a US equity strategist at BofA Securities, offers a more optimistic outlook, forecasting a 12% boost in dividends this year, fueled by accelerating earnings growth.
Dividends historically accounted for 40% of the market’s total return from 1936 to 2012 but have contributed only 16% over the past ten years, according to a research note from BofA Securities released late last year. Looking forward, Kwon anticipates that dividends will have a more significant impact on total returns compared to the previous decade.
Dividends hold particular significance, especially as the broader market has experienced consecutive gains of over 20%, a scenario not seen since the late 1990s. Moreover, the low payout ratio, currently at 29% compared to the historical average of 50%, suggests there is considerable potential for companies to increase their dividend payouts. Kwon pointed out that another key factor supporting dividend investing is the growing number of retired baby boomers seeking income. With cash products yielding around 4%, there is a strong demand for dividends, as investors are looking for immediate cash returns and are pressuring companies to increase their dividend distributions.
This optimism about dividend stocks is largely rooted in their historical performance, as they have been instrumental in reducing overall portfolio volatility and can help cushion losses when stock prices decline. Research indicates that dividend-paying stocks often outperform their non-dividend-paying counterparts during bear markets, such as during the tech bubble burst in the early 2000s and the global financial crisis. This may be because companies that pay dividends are typically larger, more established, and more profitable, making them more resilient than the broader market.
From October 2019 to September 2024, a period marked by significant fluctuations in the market’s total performance, equity income funds demonstrated lower volatility and reduced downside risk compared to the broader market. Given this, we will discuss the most reliable dividend stocks to invest in.
Photo by Sharon McCutcheon on Unsplash
Our Methodology:
For this list, we used a stock screener to identify companies with a history of dividend growth spanning over 10 years. From this group, we selected companies offering dividend yields of at least 1% as of January 12. From that selection, we identified the ten stocks that hedge funds favored the most during the third quarter of 2024, based on data from Insider Monkey’s database. The stocks are ranked in ascending order 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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
12. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 72
Comcast Corporation (NASDAQ:CMCSA) is an American telecommunications company that offers a wide range of mobile phone and cable TV services. The stock is down by nearly 16% in the past 12 months. The media giant faced a setback after cautioning that it anticipates losing over 100,000 broadband subscribers this quarter. This drop surpasses the total net loss experienced during the first half of the year and highlights a worsening trend, building on the 87,000 internet accounts it shed in the third quarter.
That said, Comcast Corporation (NASDAQ:CMCSA) generated strong earnings in the third quarter of 2024. The company reported revenue of $32.07 billion, marking a 7% rise from the same period in the previous year. It demonstrated robust performance, with broadband average revenue per user (ARPU) increasing by 3.6% and a 5% growth in its connectivity segment. The Connectivity & Platforms division achieved an adjusted EBITDA margin of 40.9%. In addition, Comcast successfully hosted the Paris Summer Olympics, which significantly boosted Peacock’s revenue and subscriber numbers, while also reinforcing NBC’s status as the leading network for the 2023-2024 season.
From a dividend standpoint, Comcast Corporation (NASDAQ:CMCSA) upheld a solid cash position. In the most recent quarter, it generated more than $7 billion in operating cash flow, with free cash flow surpassing $3.4 billion. Additionally, the company returned $1.2 billion to shareholders through dividend payments. On January 7, the company declared a quarterly dividend of $0.31 per share, which was in line with its previous dividend. Overall, it has been growing its dividends for the past 16 years, which makes CMCSA one of the best dividend stocks on our list. The stock has a dividend yield of 3.41%, as of January 12.
Comcast Corporation (NASDAQ:CMCSA) experienced a positive hedge fund sentiment as the company ended Q3 2024 with 72 hedge fund positions, up from 61 in the previous quarter, as per Insider Monkey’s database. The stakes held by these funds have a total value of more than $5.44 billion.
11. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) is an American semiconductor company, based in California. The company offers a wide range of wireless technology services. In fiscal Q4 2024, it posted strong earnings, with revenues totaling $10.24 billion, an 18% increase from the same period the previous year. Net income climbed 33% year-over-year to $3.5 billion. In addition, the company recorded an annual earnings per share growth exceeding 30% for fiscal 2024.
QUALCOMM Incorporated (NASDAQ:QCOM) has secured a strong foothold in the smartphone chip sector and is poised to benefit from the fast-growing generative AI smartphone market. IDC forecasts this market to expand at an annual rate of 78% through 2028, with yearly shipments expected to hit 912 million units by the end of the forecast period. Moreover, the company is the second-largest player in the smartphone application processor market, commanding a 31% market share, as reported by Counterpoint Research. In the past 12 months, the stock has surged by nearly 12%.
Madison Investments highlighted QCOM in its Q3 2024 investor letter. Here is what the firm has to say:
“Alphabet Inc., Eli Lilly and Company, QUALCOMM Incorporated (NASDAQ:QCOM), Microsoft Corporation, and Apple Inc. were the largest detractors. Qualcomm has given back some of its first half gains after the CFO commented at a conference that its entrance into the AI PC business would take time to ramp. We continue to see Qualcomm as well positioned with growth from AI moving into the mobile phone, from new opportunities in the Internet of Things (IoT), and within the Auto industry but will also look to future growth as they enter the PC market.”
QUALCOMM Incorporated (NASDAQ:QCOM) holds a solid cash position to support its dividend distributions. By the close of the quarter, the company had $8 billion in cash and cash equivalents. Its operating cash flow rose to $12.2 billion, compared to $11.3 billion in the same quarter of the previous year. Throughout the quarter, QUALCOMM returned $2.2 billion to shareholders through dividends and share repurchases. The company offers a quarterly dividend of $0.85 per share and has a dividend yield of 2.17%, as of January 12. It is one of the best dividend stocks on our list as the company has been rewarding shareholders with growing dividends for the past 20 years.
At the end of Q3 2024, 74 hedge funds tracked by Insider Monkey held stakes in QUALCOMM Incorporated (NASDAQ:QCOM), worth over $3.2 billion in total. With over 2 million shares, Two Sigma Advisors was the company’s leading stakeholder in Q3.
10. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
NIKE, Inc. (NYSE:NKE) is an American multinational footwear and apparel company that offers products for men, women, and children. According to analysts, despite recent challenges and two decades of flat operating margins, the company presents a compelling investment opportunity. The optimistic outlook is largely based on the company’s scale, legacy, and extensive network of partner athletes. While Nike operates in one of the world’s most competitive industries, its scale enables it to invest billions annually to collaborate with top athletes and maintain a presence at premier sporting events. This visibility keeps the company in the spotlight and drives consistent demand year after year. Notably, about three-quarters of NBA players wear Nike or Jordan brand shoes, and half of the players in the 2022 FIFA World Cup donned Nike uniforms. This strong market position should allow Nike to continue signing top athletes across generations, provided management executes effectively.
NIKE, Inc. (NYSE:NKE) reported mixed earnings in fiscal Q2 2025. The company posted revenue of $12.35 billion, down 7.7% from the same period last year. Its wholesale revenues also fell by 3% on a YoY basis at $6.9 billion. The company’s inventories stood at $8.0 billion, unchanged from the previous year. This stability resulted from an increase in units, balanced by reduced product input costs and changes in the product mix.
That said, NIKE, Inc. (NYSE:NKE)’s cash position remained stable in Q2 2025. The company ended the quarter with $7.9 billion available in cash and cash equivalents, up 1% from the same period last year. Moreover, it returned $1.6 billion to shareholders through dividends and share repurchases, which makes NKE one of the best dividend stocks. The company holds a 23-year streak of consistent dividend growth. Currently, it pays a quarterly dividend of $0.40 per share for a dividend yield of 2.25%, as of January 12.
The number of hedge funds tracked by Insider Monkey owning stakes in NIKE, Inc. (NYSE:NKE) grew to 75 in Q3 2024, from 66 in the previous quarter. The consolidated value of these stakes is more than $5 billion. Among these hedge funds, Pershing Square was the company’s leading stakeholder in Q3.
9. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 76
Starbucks Corporation (NASDAQ:SBUX) ranks ninth on our list of the best dividend stocks. The American multinational chain of coffeehouses specializes in a wide range of coffee beverages. While the economy, particularly consumer spending, has demonstrated resilience over the past year amid ongoing uncertainty, Starbucks hasn’t seen the same level of success. The retail coffee market’s intense competition and fragmentation present significant challenges for the company. In the US, the top five coffee chains together control less than half of the market, providing consumers with numerous alternatives to major chains. With no barriers to switching, customers can easily opt for other choices, leaving Starbucks with minimal room for mistakes—an issue that appears to be impacting its performance. In the past 12 months, the stock has shown a modest return of 0.29%.
Starbucks Corporation (NASDAQ:SBUX) delivered mixed results in fiscal Q4 2024. The company reported $9.07 billion in revenue, a 3.2% decline compared to the same quarter last year. Despite this, its cash position remained steady, with $6 billion in operating cash flow. During the quarter, the company expanded its footprint by adding 722 net new stores, bringing its total to 40,199 locations. Of these, 52% are company-operated, while 48% are run under licensing agreements.
Invesco Distributors, Inc. highlighted Starbucks Corporation (NASDAQ:SBUX) in its Q3 2024 investor letter. Here is what the firm has to say:
“Starbucks Corporation (NASDAQ:SBUX): The coffee retailer has struggled with China’s economic softness, declining sales and weaker US store traffic that have hampered revenues and profit margins. However, we believe the company has several positive, long-term catalysts, including strong growth in store count, better labor relations, improving productivity from labor, technology and innovation, and easier future earnings comparisons. We believed a management change was imminent, and shortly after we purchased the stock, Starbucks named a new CEO, which was seemingly greeted enthusiastically by investors.”
On December 11, Starbucks Corporation (NASDAQ:SBUX) declared a quarterly dividend of $0.61 per share, which was in line with its previous dividend. The company’s dividend growth streak spans over 14 years. The stock supports a dividend yield of 2.64%, as of January 12.
As of the close of Q3 2024, 76 hedge funds tracked by Insider Monkey held stakes in Starbucks Corporation (NASDAQ:SBUX), up from 70 in the previous quarter. These stakes are collectively valued at over $3.2 billion.
8. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 78
Union Pacific Corporation (NYSE:UNP) is an American transportation company that operates railroads, connecting 23 states. Railroads provide an incredibly efficient way to transport goods over land, with Union Pacific playing a central role in moving a wide range of bulk commodities. This diverse revenue stream helps stabilize the company’s income, though its performance is still influenced by economic cycles. When the economy is doing well, demand for products like agricultural goods, industrial materials, and energy increases, driving a higher need for the company’s services. On the other hand, during economic downturns, demand for these goods tends to fall. Despite these cyclical fluctuations, railroads typically maintain strong operating margins regardless of economic conditions.
In the third quarter of 2024, Union Pacific Corporation (NYSE:UNP) posted revenue of $6.01 billion, marking a 1% increase compared to the same quarter last year. Freight revenue, excluding fuel surcharge income, grew by 5%, driven by a 6% rise in revenue carloads. The company’s operating income reached $2.4 billion, an 11% increase.
Union Pacific Corporation (NYSE:UNP) also showed a solid cash position. In the first nine months of the year, it reported an operating cash flow of $6.7 billion, up from $5.9 billion during the same period last year. Free cash flow for the period also increased significantly, reaching $1.8 billion compared to $955 million in the previous year. The company has consistently honored its commitment to shareholders, having paid uninterrupted dividends to investors for 125 consecutive years. In addition, it has been growing its payouts for 18 consecutive years, which makes UNP one of the best dividend stocks. The company pays a quarterly dividend of $1.34 per share and has a dividend yield of 2.38%, as of January 12.
Union Pacific Corporation (NYSE:UNP) was a part of 78 hedge fund portfolios at the end of Q3 2024, compared with 82 in the previous quarter, according to Insider Monkey’s database. The stakes held by these funds have a total value of over $4.4 billion.
7. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 80
An American multinational pharmaceutical industry company, Pfizer Inc. (NYSE:PFE) was the first drugmaker to launch a COVID-19 vaccine in the US, ahead of Moderna. In addition to its vaccine, the large pharmaceutical company offers a wide range of other products, including treatments for autoimmune diseases, cancer, migraines, and more. According to analysts, the company’s growth potential might be stronger than many realize. The company has made significant investments in internal research and development, along with several important acquisitions. These efforts have brought notable additions to Pfizer’s portfolio, such as the RSV vaccine Abrysvo, the migraine treatment Nurtec ODT, and cancer drugs Adcetris and Padcev.
In the third quarter of 2024, Pfizer Inc. (NYSE:PFE) reported revenue of $17.7 billion, a notable 32% increase compared to the same quarter last year. The company also effectively met the increased demand for Paxlovid during the recent rise in COVID-19 cases. Parnassus Investments highlighted Pfizer Inc. (NYSE:PFE) in its Q1 2024 investor letter. Here is what the firm has to say:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
Pfizer Inc. (NYSE:PFE) declared a 2.4% increase in its quarterly dividend on December 13, 2024. This was the company’s 15th consecutive year of dividend growth, which makes PFE one of the best dividend stocks on our list. The company now pays a quarterly dividend of $0.43 per share and has a dividend yield of 6.44%, as of January 12. This strong dividend history comes from its solid cash position. In the first nine months of 2024, the company distributed $7.1 billion through dividends.
As per Insider Monkey’s database of Q3 2024, 80 hedge funds tracked by Insider Monkey held investments in Pfizer Inc. (NYSE:PFE), compared with 84 in the previous quarter. The collective value of these stakes is more than $3 billion.
6. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 81
Johnson & Johnson (NYSE:JNJ) is an American pharmaceutical company, based in New Jersey. The company specializes in a wide range of biotech and medical products and offers related services to consumers. In 2023, the company reorganized its operations by spinning off its Consumer Health division, enabling it to focus on high-margin, innovation-driven areas. The rebranded Pharmaceuticals division, now called Innovative Medicine, continues to perform well, driving significant revenue through blockbuster drugs like STELARA and DARZALEX. In addition, the company has consistently expanded its portfolio through various acquisitions, with its most recent purchase being the medical device company V-Wave. The initial payment for the deal was $600 million, with additional milestone payments potentially reaching up to $1.1 billion, depending on regulatory approvals and commercial success.
Johnson & Johnson (NYSE:JNJ) reported solid earnings for the third quarter of 2024, with revenues totaling $22.4 billion, a 5.25% increase from the same period last year. For the first nine months of the year, the company generated $14 billion in free cash flow, up from $11.9 billion in the prior year. The company has updated its 2024 guidance, including adjusted operational earnings per share (EPS), to reflect stronger performance and the impact of its recent V-Wave acquisition. It now expects adjusted operational sales to grow between 5.7% and 6.2%, with a midpoint of 6.0%.
Johnson & Johnson (NYSE:JNJ) is one of the strongest dividend payers in the market, having raised its payouts for 62 consecutive years. On January 2, the company declared a quarterly dividend of $1.24 per share, which was consistent with its previous dividend. The stock’s dividend yield on January 12 came in at 3.49%.
Insider Monkey’s database of Q3 2024 indicated that 81 hedge funds held stakes in Johnson & Johnson (NYSE:JNJ), up from 80 in the previous quarter. These stakes are worth over $5.4 billion in total. With over 7.5 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
5. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 82
The Home Depot, Inc. (NYSE:HD) ranks fifth on our list of the best dividend stocks. The American home improvement company is currently facing some challenges. As the business is closely tied to the housing market, it has been affected by rising interest rates and inflationary pressures on consumers in recent years. However, Home Depot remains the dominant player in its industry, which management values at $1 trillion. The aging housing stock, combined with a shortage of available homes, is expected to drive long-term demand. In addition, the recent decline in interest rates should provide some support. In the past 12 months, the stock has surged by nearly 10%.
In the third quarter of 2024, The Home Depot, Inc. (NYSE:HD) reported $40.22 billion in revenue, marking a 6.6% increase from the same quarter last year. It achieved operating income of $5.4 billion, with an operating margin of 13.5%. The growth was driven by higher customer demand for seasonal products and outdoor projects, along with a boost in sales from hurricane-related needs.
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.”
The Home Depot, Inc. (NYSE:HD) maintained a strong cash position in FY24. In the first nine months of the year, the company generated over $15 billion in operating cash flow. This strong financial performance allows the company to continue its reputation as a reliable dividend payer. It has been consistently increasing its dividend payouts to shareholders for 14 consecutive years. Its quarterly dividend currently comes in at $2.25 per share for a dividend yield of 2.31%, as of January 12.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 82 funds held stakes in The Home Depot, Inc. (NYSE:HD), down from 86 in the previous quarter. These stakes have a total value of roughly $7.6 billion.
4. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Exxon Mobil Corporation (NYSE:XOM) is an American oil and gas company engaged in the exploration, production, refining, and distribution of petroleum products. The company has a presence in all three key segments of the broader energy industry. While oil and natural gas prices remain the primary factors influencing its financial performance, its involvement in the midstream and downstream sectors helps stabilize earnings by offsetting the fluctuations in prices. The stock is up by over 6.5% in the past 12 months.
Exxon Mobil Corporation (NYSE:XOM) reported $90.02 billion in revenue for Q3 2024, surpassing analysts’ expectations by $1.66 billion. The company continues to lead in carbon capture and storage, having secured a new agreement that raises its annual CO2 offtake commitments to 6.7 million metric tons, outpacing all competitors in the field. The company also showed strong financial results, generating $17.6 billion in operating cash flow and $11.3 billion in free cash flow for the quarter. Furthermore, it returned $9.8 billion to shareholders through dividends and stock repurchases.
Exxon Mobil Corporation (NYSE:XOM), one of the best dividend stocks, has been increasing its dividends for 42 years running. It currently offers a per-share dividend of $0.99 every quarter and has a dividend yield of 3.72%, as of January 12.
As of the end of Q3 2024, 86 hedge funds in Insider Monkey’s database owned stakes in Exxon Mobil Corporation (NYSE:XOM), down from 92 in the previous quarter. These stakes are valued at nearly $7 billion in total. First Eagle Investment Management was one of the company’s leading stakeholders.
3. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is an American pharmaceutical company that mainly provides innovative health solutions to its consumers. The company has become a leader in specialty pharmaceuticals and oncology, with its flagship cancer drug, Keytruda, transforming treatment protocols and contributing significantly to revenue growth. Its strong market position results in substantial cash flows, which are used to fund returns to shareholders.
Keytruda has been approved for a variety of uses. Recently, Merck & Co., Inc. (NYSE:MRK) announced that a Phase 3 trial for Keytruda in a specific type of ovarian cancer achieved its primary goal of improving progression-free survival, although it did not meet the secondary goal of extending overall survival. Currently, Keytruda is approved for 40 oncology indications in the US, and Merck is working to secure similar approvals in major international markets like the European Union and Japan, where these indications have yet to be authorized.
In the third quarter of 2024, Keytruda’s sales increased by 17% compared to the previous year, reaching $7.4 billion.
This performance was also highlighted in GreensKeeper Asset Management’s Q3 2024 investor letter. Here is what the firm shared:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
In November 2024, Merck & Co., Inc. (NYSE:MRK) declared a 5.2% hike in its quarterly dividend to $0.81 per share. Through this increase, the company stretched its dividend growth streak to 14 years, which makes MRK one of the best dividend stocks on our list. As of January 12, the stock has a dividend yield of 3.26%.
As per Insider Monkey’s database of Q3 2024, 86 hedge funds held stakes in Merck & Co., Inc. (NYSE:MRK), compared with 96 in the preceding quarter. The consolidated value of these stakes is over $7.1 billion. Ken Griffin’s Citadel Investment Group was one of the company’s leading stakeholders in Q3.
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 112
UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational health insurance company. It reported strong earnings in the third quarter of 2024, with revenue of $100.8 billion, marking a 9.16% increase from the same period last year. Its domestic commercial offerings have experienced notable growth, adding 2.4 million new consumers this year. The projected net earnings for the full year 2024 are estimated at $15.50 to $15.75 per share, factoring in the sale of its South American operations earlier in the year and the effects of the Change Healthcare cyberattack.
PGIM Jennison Health Sciences Fund mentioned UNH in its Q3 2024 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated (NYSE:UNH) is the largest health care services company in the U.S. The company offers healthcare benefits to Americans who receive insurance from employers or government-based programs such as Medicare and Medicaid. Half of the company is represented from non-benefits businesses under the Optum umbrella. This includes a technology business that helps hospitals, pharma companies, and other payors. It also includes a fast-growing provider business where Optum owns surgery centers and urgent care centers. The company’s primary care business continues to grow and it’s participating in the emerging trend of primary care taking on risk and acting like an insurance company. Finally, UnitedHealth owns a drug benefits manager. The company continues to have high quality and well-positioned businesses. In the first half of ’24, UnitedHealth has beat earnings expectations and confirmed full year financial guidance. While medical costs have pressured results, the company has cut a lot of spending to support earnings. We have also seen volatility in the stock related to political dynamics; a view that Republicans are better for this group helped support the stock in June and July and a moderation in policy views from the democratic nominee also helped support the stock. Future catalysts for the company and the stock include potentially stabilizing cost trend, a calmer political environment, and visibility into the company’s long-term earnings growth targets.”
UnitedHealth Group Incorporated (NYSE:UNH) holds a strong dividend history. The company started paying annual dividends in 1990 and then shifted to quarterly payouts in 2010. Since then, it has raised its payouts every year, which makes UNH one of the best dividend stocks on our list. The company offers a quarterly dividend of $2.10 per share and has a dividend yield of 1.61%, as of January 12.
UnitedHealth Group Incorporated (NYSE:UNH) was included in 112 hedge fund portfolios at the end of Q3 2024, compared with 114 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these funds are worth over $15 billion. With over 3.7 million shares, GQG Partners was the company’s leading stakeholder in Q3.
1. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) is an American multinational semiconductor company that offers a wide range of semiconductor and infrastructure software products. The company is behind a wide range of products used in everything from data centers to smartphones. A notable statistic highlighting its dominance in the networking space is that over 99% of all internet traffic passes through Broadcom technology. The company is also benefiting from its acquisition of cloud virtualization company VMware, which was finalized a year ago. VMware’s operating margin has reached 70%, and Broadcom is on track to achieve an adjusted EBITDA exceeding its target of $8.5 billion within three years.
Broadcom Inc. (NASDAQ:AVGO) recently announced its Q4 2024 earnings, reporting revenue of $14.05 billion, which represents a substantial growth of over 51% compared to the same period last year. Semiconductor revenue hit a record $30.1 billion, driven by $12.2 billion in AI revenue. The AI revenue, which grew 220% year-over-year, was primarily fueled by the company’s advanced AI XPUs and Ethernet networking portfolio. For fiscal year 2024, adjusted EBITDA increased by 37% from the previous year, reaching a record $31.9 billion.
Broadcom Inc. (NASDAQ:AVGO), one of the best dividend stocks, currently offers a quarterly dividend of $0.59 per share, having raised it by 11.3% in December 2024. This was the company’s 14th consecutive year of dividend growth. The company achieved this dividend growth because of its strong cash position. During the quarter, the company generated over $5.6 billion in operating cash flow, with free cash flow totaling $5.48 billion. This cash flow accounted for 39% of the company’s revenue. The stock supports a dividend yield of 1.05%, as of January 12.
As of the end of Q3 2024, 128 hedge funds in Insider Monkey’s database held stakes in Broadcom Inc. (NASDAQ:AVGO), compared with 130 in the previous quarter. The consolidated value of these stakes is over $14.5 billion.
Overall, Broadcom Inc. (NASDAQ:AVGO) ranks first on our list of the best dividend stocks. While we acknowledge the potential for AVGO to grow, 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 AVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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