In this article, we discuss 12 under-the-radar high dividend stocks to invest in now. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Under-the-Radar High Dividend Stocks to Invest in Now.
Dividend investing in back in the limelight in 2024. Tech companies, which are mainly known for their growth initiatives, are now venturing into another territory by starting their dividend policies. Earlier this year, Meta Platforms, Inc. (NASDAQ:META) took the leap with its inaugural dividend announcement, soon followed by Salesforce, Inc. (NYSE:CRM). On April 25, Alphabet Inc. (NASDAQ:GOOG) also joined the dividend club by announcing its first-ever dividend of $0.20 per share. This way, these companies are providing shareholders with dual benefits of potential for growth and capital return. Andrew Zamfotis, portfolio manager at Ami Asset Management Corp, made the following comment on Alphabet’s new dividend in his interview with Bloomberg:
“A dividend would be well received. While investors are still looking for growth from these companies, today there is also value in cost discipline and the decision to initiate a dividend suggests that management will be prudent and attempt to allocate capital in a way that balances growth and capital return.”
Dividends paid by the US companies have increased significantly over the years. In our article titled 14 Best Consistent Dividend Stocks To Invest In, we referred to S&P Dow Jones Indices data, which revealed that dividend payments of the S&P 500 companies jumped from $420 billion in 2017 to $565 billion in 2022. Last year, the figure reached its all-time high of $588.2 billion. Global dividends also hit their record high of $1.66 trillion in 2023, achieving their third consecutive year of a new high after a slight drop during the pandemic of 2020, according to a report by Janus Henderson Group Plc. This marked a 5% growth from $1.57 trillion in dividend payouts in 2022. The report now forecasts that total dividends will rise to a new peak of $1.72 trillion this year, showing a 3.9% increase on a headline basis.
Dividends have remained an important part of the stock market historically. In fact, dividends accounted for an average of 34% of the S&P 500’s overall return from 1940 to 2023. Dividend stocks are also recognized for their tendency to fare better during market downturns. For example, during a market decline such as the one witnessed in 2022, dividend stocks in the S&P 500 fell by over 11%, compared to an over 18% decline in the S&P 500. Moreover, in that year, companies that did not pay dividends suffered a much steeper loss of 38.7%. Dividend growers take the lead in dividend investing, providing investors with regular growing streams of income. We previously reported in one of our articles that over the past 20 years ending in 2022, dividend growers and initiators have returned 10.68%, surpassing a 2.70% return of those that cut or eliminated their dividends during this period.
While companies like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and AbbVie Inc (NYSE:ABBV) are well-known among dividend investors, numerous other dividend-paying companies maintain a low profile. However, sometimes these companies tend to be well-established businesses that have a competitive edge in industries experiencing slow growth. In this article, we will take a look at some of the best under-the-radar stocks that pay dividends.
Image by Steve Buissinne from Pixabay
Our Methodology:
To compile this list, we thoroughly reviewed reputable sources such as Forbes, Morningstar, Barron’s, and Business Insider. From their latest articles, we gathered 12 under-the-radar dividend stocks that are lesser known among investors but offer great investment opportunities. These stocks have yields ranging from over 3% to as high as 11%, as of April 27. The stocks are ranked in ascending order of their dividend yields.
Data from over 900 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
12. Polaris Inc. (NYSE:PII)
Dividend Yield as of April 27: 3.15%
Polaris Inc. (NYSE:PII) is an American automotive industry company that designs and manufactures a wide range of off-road vehicles. On April 25, the company declared a quarterly dividend of $0.66 per share, which was in line with its previous dividend. It has been growing its dividends consistently for the past 29 years, which makes it one of the best under-the-radar stocks. The stock has a dividend yield of 3.15%, as of April 27.
In FY23, Polaris Inc. (NYSE:PII) reported an operating cash flow of over $926 million, and its free cash flow came in at $507 million. During the first quarter of 2024, the company returned $37 million to shareholders through dividends.
At the end of Q4 2023, 25 hedge funds tracked by Insider Monkey held stakes in Polaris Inc. (NYSE:PII), up from 23 in the previous quarter. These stakes have a total value of more than $315 million. Among these hedge funds, Alyeska Investment Group was the company’s leading stakeholder in Q4.
11. Radian Group Inc. (NYSE:RDN)
Dividend Yield as of April 27: 3.23%
Radian Group Inc. (NYSE:RDN) is a Pennsylvania-based insurance company that offers services in mortgage, risk management, and real estate. On February 14, the company declared an 8.9% hike in its quarterly dividend to $0.245 per share. Through this increase, the company stretched its dividend growth streak to five years. With a dividend yield of 3.23% as of April 27, RDN is one of the best under-the-radar stocks with high yields.
As of the close of Q4 2023, 22 hedge funds in Insider Monkey’s database owned stakes in Radian Group Inc. (NYSE:RDN), growing from 19 in the preceding quarter. These stakes have a total value of over $122.5 million.
10. Southwest Gas Holdings, Inc. (NYSE:SWX)
Dividend Yield as of April 27: 3.31%
An American natural gas utility company, Southwest Gas Holdings, Inc. (NYSE:SWX) is next on our list of the best under-the-radar stocks with high yields. The company has raised its payouts for 15 years straight and currently pays a quarterly dividend of $0.62 per share. As of April 27, the stock has a dividend yield of 3.31%.
Southwest Gas Holdings, Inc. (NYSE:SWX) was a part of 20 hedge fund portfolios at the end of Q4 2023, compared with 21 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds have a consolidated value of over $1.22 billion.
9. John Wiley & Sons, Inc. (NYSE:WLY)
Dividend Yield as of April 27: 3.65%
John Wiley & Sons, Inc. (NYSE:WLY) is an American publishing company that deals in academic, educational, and professional content. The company’s current quarterly dividend comes in at $0.35 per share for a dividend yield of 3.65%, as of April 27. In 2023, it achieved its 30th consecutive annual dividend hike, which makes WLY one of the best under-the-radar high-dividend stocks.
In the first three months of 2024, John Wiley & Sons, Inc. (NYSE:WLY) reported an operating cash flow of $24 million and its free cash flow for the period came in at $45 million. During this period, the company returned $87 million to shareholders through dividends and share repurchases.
John Wiley & Sons, Inc. (NYSE:WLY) was a popular buy among elite funds in Q4 2023 with hedge fund positions growing from 19 in the previous quarter to 27 in Q4, as per Insider Monkey’s database. The stakes held by these funds have a total value of over $84.3 million.
8. Flowers Foods, Inc. (NYSE:FLO)
Dividend Yield as of April 27: 3.76%
Flowers Foods, Inc. (NYSE:FLO) is a Georgia-based bakery company that produces packaged bakery products. The company’s current quarterly dividend comes in at $0.23 per share for a dividend yield of 3.76%, as of April 27. The company holds a 21-year track record of consistent dividend growth.
In FY23, Flowers Foods, Inc. (NYSE:FLO) generated an operating cash flow of roughly $350 million. The company remained committed to its shareholder obligation, returning $195.2 million to investors through dividends.
According to Insider Monkey’s database of Q4 2023, 26 hedge funds held stakes in Flowers Foods, Inc. (NYSE:FLO), compared with 27 in the previous quarter. These stakes have a total value of more than $252.7 million. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q4.
7. Portland General Electric Company (NYSE:POR)
Dividend Yield as of April 27: 4.67%
Portland General Electric Company (NYSE:POR) is an American public utility company that provides electricity to its consumers. On April 22, the company declared a 5.3% hike in its quarterly dividend to $0.50 per share. This marked the company’s 18th consecutive year of dividend growth, which makes POR one of the best under-the-radar high-dividend stocks. The stock’s dividend yield on April 27 came in at 4.67%.
According to Insider Monkey’s database of Q4 2023, 16 hedge funds held stakes in Portland General Electric Company (NYSE:POR), compared with 21 in the previous quarter. The consolidated value of these stakes is roughly $122 million.
6. WesBanco, Inc. (NASDAQ:WSBC)
Dividend Yield as of April 27: 5.23%
WesBanco, Inc. (NASDAQ:WSBC) ranks sixth on our list of the under-the-radar dividend stocks with high yields. The bank holding company has been growing its dividends for the past 12 years and offers a quarterly dividend of $0.36 per share. The stock has a dividend yield of 5.23%, as of April 27.
Insider Monkey’s database of Q4 2023 indicated that 6 hedge funds held stakes in WesBanco, Inc. (NASDAQ:WSBC), compared with 10 in the previous quarter. These stakes have a total value of more than $8.6 million. Cliffe Asness’ AQR Capital Management was the company’s leading stakeholder in Q4.
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Disclosure. None. 12 Under-the-Radar High Dividend Stocks to Invest in Now is originally published on Insider Monkey.
