In this article, we discuss 14 best long-term dividend stocks to buy now. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read 5 Best Long-Term Dividend Stocks To Buy Now.
For long-term investing, many investors aim for not just growth but a steady stream of income to keep their financial ship sailing smoothly. That’s where dividend stocks come in. These equities accounted for an average of 34% of the market’s total returns from 1940 to 2023 and made significant contributions during decades of high inflation. This shows that building wealth through dividends takes time and patience, so one shouldn’t expect a bountiful harvest overnight.
A clear example of the power of dividends can be observed through Warren Buffett’s investment in The Coca-Cola Company (NYSE:KO). Berkshire Hathaway acquired KO shares for $1.3 billion back in 1994 and received $75 million in cash dividends through this investment. In 2023, the dividend amount received by Berkshire had skyrocketed to a staggering $736 million, and it is set to receive $776 million in Coke dividends this year. This highlights the compounding effect of dividends and solid returns they can deliver to long-term investors like Buffett. In addition to compounding benefits, it is worth mentioning that the company has consistently increased its dividends for over six decades. That is why financial experts always advise investing in dividend-growth stocks for long-term gains.
Kirsten Cabacungan, an investment strategist in the Chief Investment Office for Merrill and Bank of America Private Bank, spoke about the importance of dividend growth stocks in the firm’s annual report. Here is what she said:
“Generally, it’s larger, more mature companies that return capital to their shareholders in the form of dividends. Companies that have consistently increased their dividends tend to be more stable, higher-quality businesses, which historically have weathered downturns and are more likely to have the ability to pay dividends consistently.”
That said, maintaining dividend growth over time demands financial stability and unwavering commitment. Dividend growth stocks have outperformed the S&P 500 due to their potential for capital appreciation and financial health. The S&P 500 Dividend Aristocrats Index, which tracks the performance of companies with at least 25 consecutive years of dividend growth, delivered a 10.68% return to shareholders since its inception in 2005 through 2023, as we reported in our article, 14 Dividend Growth Stocks with Highest Growth Rates, citing data from ProShares. During this period, the broader market underperformed the dividend aristocrats and returned 10.05%. We also reported that dividend aristocrats achieved these returns with a lower volatility of 15.30%, compared with a 16.24% volatility of the benchmark.
Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO) are some of the best dividend stocks for long-term investments as these companies have raised their payouts for decades, which shows their sound financial position. In this article, we will further take a look at some of the best long-term dividend stocks to invest in.
Photo by Dan Dennis on Unsplash
Our Methodology:
To compile this list, we thoroughly reviewed reputable sources such as Forbes, Morningstar, Barron’s, CNBC, Times, and Business Insider. We aimed to identify the top long-term dividend stocks recommended by financial media, analysts, and experts. From our research, we picked 14 dividend stocks which are the mot popular in the financial media these days. These stocks have strong dividend histories and are financially sound, indicating their ability to sustain dividend payments well into the future. The list is ranked in ascending order of the number of hedge fund investors, according to Insider Monkey’s database of 933 hedge funds as of Q4 2023. 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.
14. Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 37
Chubb Limited (NYSE:CB) is an American insurance company that offers a wide range of related products and services to its consumers. The company currently pays a quarterly dividend of $0.86 per share and has a dividend yield of 1.35%, as recorded on May 13. It is one of the best dividend stocks on our list as the company has been growing its dividends for the past 30 consecutive years.
At the end of Q4 2023, 37 hedge funds tracked by Insider Monkey owned stakes in Chubb Limited (NYSE:CB), compared with 43 in the previous quarter. These stakes are valued at over $942.3 million. Among these hedge funds, Polar Capital was the company’s leading stakeholder.
13. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 42
Altria Group, Inc. (NYSE:MO) is a Virginia-based tobacco company that also manufactures other nicotine products. In the first quarter of 2024, the company remained committed to its shareholder obligation, returning $1.7 billion to investors through dividends. Moreover, it has been growing its dividends consistently for the past 54 years and offers a quarterly dividend of $0.98 per share. With a dividend yield of 8.70% as of May 13, MO is one of the best dividend stocks for long-term investors.
As of the close of Q4 2023, 42 hedge funds in Insider Monkey’s database owned stakes in Altria Group, Inc. (NYSE:MO), up from 40 in the previous quarter. These stakes have a collective value of over $1 billion.
12. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 44
The Kraft Heinz Company (NASDAQ:KHC) is an Illinois-based food company that deals in a wide range of snacks and beverages. On May 1, the company declared a quarterly dividend of $0.40 per share, which was in line with its previous dividend. As of May 13, the stock has an impressive dividend yield of 4.40%.
In the first quarter of 2024, The Kraft Heinz Company (NASDAQ:KHC) reported an operating cash flow of $771 million, which showed a 58.6% growth from the same period last year. The company’s free cash flow for the period came in at $477 million, up 116.8% from the prior-year period. It returned $486 million to shareholders through dividends.
The number of hedge funds tracked by Insider Monkey owning stakes in The Kraft Heinz Company (NASDAQ:KHC) grew to 44 in Q4 2023, from 40 in the previous quarter. The consolidated value of these stakes is more than $13.5 billion. Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q4.
11. Marsh & McLennan Companies, Inc. (NYSE:MMC)
Number of Hedge Fund Holders: 52
Marsh & McLennan Companies, Inc. (NYSE:MMC) is a New York-based insurance company that offers services in areas of risk, strategy, and human capital. On March 13, the company announced a quarterly dividend of $0.71 per share, which fell in line with its previous dividend. The company has been raising its dividends consistently for the past 14 years, which makes MMC one of the best dividend stocks for long-term investors. The stock has a dividend yield of 1.38%, as of May 13.
According to Insider Monkey’s database of Q4 2023, 52 hedge funds held stakes in Marsh & McLennan Companies, Inc. (NYSE:MMC), up from 50 in the previous quarter. These stakes are worth over $1.4 billion in total. With over 1.3 million shares, Impax Asset Management was the company’s leading stakeholder in Q4.
10. Automatic Data Processing, Inc. (NASDAQ:ADP)
Number of Hedge Fund Holders: 54
Automatic Data Processing, Inc. (NASDAQ:ADP) is an American management services company that provides related services to its consumers. The company currently pays a quarterly dividend of $1.40 per share and has a dividend yield of 2.25%, as of May 13. It is one of the best dividend stocks for long-term investors as the company has been growing its payouts for 49 consecutive years.
Insider Monkey’s database of Q4 2023 indicated that 54 hedge funds owned stakes in Automatic Data Processing, Inc. (NASDAQ:ADP), growing from 50 in the previous quarter. These stakes are collectively valued at over $3 billion.
9. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 56
Medtronic plc (NYSE:MDT) is next on our list of the best dividend stocks for long-term investors. The American medical device company has been rewarding shareholders with growing dividends for the past 46 years. It currently pays a quarterly dividend of $0.69 per share and has a dividend yield of 3.30%, as of May 13.
At the end of December 2023, 56 hedge funds owned stakes in Medtronic plc (NYSE:MDT), compared with 59 in the preceding quarter, as per Insider Monkey’s database. These stakes are valued at over $2.68 billion collectively. Among these hedge funds, First Eagle Investment Management was the company’s leading stakeholder in Q4.
8. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 58
Target Corporation (NYSE:TGT) is a Minnesota-based retail company that operates a chain of hypermarkets and discount department stores. The company’s quarterly dividend currently comes in at $1.10 per share and has a dividend yield of 2.72%, as of May 13. It maintains a 52-year track record of consistent dividend growth, which makes TGT one of the best dividend stocks for long-term investors.
Target Corporation (NYSE:TGT) was included in 58 hedge fund portfolios at the end of Q4 2023, which remained unchanged from the previous quarter, as per Insider Monkey’s database. The stakes owned by these funds have a total value of more than $1.5 billion.
7. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 62
The Coca-Cola Company (NYSE:KO) is an American multinational beverage company and one of Warren Buffett’s favorite stocks. The company announced a quarterly dividend of $0.485 per share, which was consistent with its previous dividend. Overall, it has been growing its dividends consistently for the past 62 years, which places KO on our list of the best dividend stocks for the long term.
As of the end of the fourth quarter of 2023, 62 hedge funds tracked by Insider Monkey held stakes in The Coca-Cola Company (NYSE:KO), up from 57 in the previous quarter. The consolidated value of these stakes is nearly $27 billion.
6. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 63
Comcast Corporation (NASDAQ:CMCSA) ranks sixth on our list of the best dividend stocks for long-term investors. The multinational telecommunications company has raised its dividends for 16 consecutive years. It currently offers a quarterly dividend of $0.31 per share and has a dividend yield of 3.15%, as recorded on May 13.
According to Insider Monkey’s database of Q4 2023, 63 hedge funds owned stakes in Comcast Corporation (NASDAQ:CMCSA), compared with 68 in the previous quarter. The collective value of these stakes is over $4.2 billion. With nearly 32 million shares, First Eagle Investment Management was the company’s leading stakeholder in Q4.
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Disclosure. None. 14 Best Long-Term Dividend Stocks To Buy Now is originally published on Insider Monkey.