In this article, we discuss 15 best high-yield stocks to buy. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Best High Yield Stocks To Buy.
Investors exploring dividend stocks often place significant focus on dividend yields and dividend growth. Both these factors are crucial because they provide insights into a company’s financial health and its ability to generate profits and distribute them to shareholders. Despite being widely recognized and followed, dividend stocks found themselves trailing behind the performance of technology equities. Reports from Bloomberg Intelligence indicate that only $786 million has been invested into dividend exchange-traded funds (ETFs) thus far in the year. This figure represents the smallest inflow since 2006, signaling a notable decline in the attraction towards dividend-oriented investment vehicles.
D.J. Tierney, senior investment portfolio strategist at Schwab Asset Management, spoke about the performance of dividend stocks this year in one of his interviews with Bloomberg. Here is what he said:
“With a small handful of largely growth-oriented stocks dominating the market’s performance, 2023 was a challenging environment for dividend-paying, value securities, especially with the compelling case for fixed income in a higher rate environment.”
That said, analysts aren’t advising investors to avoid dividend stocks altogether. According to a report from Franklin Templeton, a blend of low volatility and consistently high dividends serves as a useful way to screen stocks, especially in times of significant uncertainty in the broader economic environment. The firm emphasizes a dividend approach that considers factors like earnings and profitability. By doing so, there’s a better chance of ensuring that a high dividend yield remains sustainable. Essentially, this approach offers a deeper evaluation of a company’s core fundamentals.
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In addition to this, high-dividend stocks have shown a strong historical performance over the years. In one of our articles, we referred to research from The Wellington study, which examined S&P 500 dividend-paying stocks from 1930 to 2019, and categorized them into five groups based on dividend yields. The top 20% of dividend payers performed best, followed by the moderate dividend group, outperforming the S&P 500 in several periods. However, the lower dividend groups didn’t fare as well, with less consistent performance compared to the index.
Leggett & Platt, Incorporated (NYSE:LEG), Altria Group, Inc. (NYSE:MO), and Enterprise Products Partners L.P. (NYSE:EPD) are some of the best dividend stocks as these companies not only offer high dividend yields but have also maintained a consistent track record of increasing their dividend payments over multiple years. In this article, we will further discuss other dividend stocks with high yields.
Photo by Dan Dennis on Unsplash
Our Methodology:
For this list, we scanned Insider Monkey’s database of 910 hedge funds as of Q3 2023 and picked dividend stocks that have yields above 4%, as of December 4. Though very high yields can pose risks, we selected companies from the list known for consistently paying dependable dividends. The stocks are ranked in ascending order of hedge fund investors having stakes in them.
15. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 23
Dividend Yield as of December 4: 5.63%
Realty Income Corporation (NYSE:O) is a real estate investment trust company that primarily deals with commercial real estate. They specialize in owning and managing a diverse portfolio of retail and commercial properties. It is one of the best dividend stocks on our list as the company pays monthly dividends to shareholders. It currently offers a monthly dividend of $0.256 per share and has a dividend yield of 5.63%, as of December 4. The company has been growing its dividends consistently for the past 29 years.
At the end of Q3 2023, 23 hedge funds in Insider Monkey’s database owned stakes in Realty Income Corporation (NYSE:O), compared with 24 in the preceding quarter. The collective value of these stakes is nearly $150 million. Among these hedge funds, Balyasny Asset Management was the company’s leading stakeholder in Q3.
14. NNN REIT, Inc. (NYSE:NNN)
Number of Hedge Fund Holders: 24
Dividend Yield as of December 4: 5.46%
An American real estate investment trust company, NNN REIT, Inc. (NYSE:NNN) is next on our list of the best dividend stocks with high yields. The company offers a quarterly dividend of $0.565 per share, having raised it by 2.7% in July this year. Through this increase, the company took its dividend growth streak to 34 years. The stock has a dividend yield of 5.46%, as of December 4.
The number of hedge funds tracked by Insider Monkey owning stakes in NNN REIT, Inc. (NYSE:NNN) grew to 24 in Q3 2023, from 21 in the preceding quarter. The consolidated value of these stakes is more than $227.7 million.
13. Best Buy Co., Inc. (NYSE:BBY)
Number of Hedge Fund Holders: 28
Dividend Yield as of December 4: 5.01%
Best Buy Co., Inc. (NYSE:BBY) is a multinational retailer, based in Minnesota. The company specializes in consumer electronics, home office products, entertainment software, appliances, and related services. It has been growing its dividends for the past 10 years and currently pays a quarterly dividend of $0.92 per share. With a dividend yield of 5.01%, BBY is one of the best dividend stocks on our list.
As of the close of Q3 2023, 28 hedge funds tracked by Insider Monkey held stakes in Best Buy Co., Inc. (NYSE:BBY), down from 31 in the previous quarter. These stakes are collectively valued at over $311.8 million. D E Shaw was one of the company’s leading stakeholders in Q3.
12. Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Holders: 34
Dividend Yield as of December 4: 9.00%
Energy Transfer LP (NYSE:ET) is a Texas-based company that is involved in the midstream and transportation aspects of the energy industry. It operates a vast network of pipelines that transport various energy resources. The company was a part of 34 hedge fund portfolios at the end of Q3 2023, which remained unchanged from the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a total value of over $803.2 million.
Energy Transfer LP (NYSE:ET), one of the best dividend stocks, has been raising its dividends for the past eight years. The company pays a quarterly dividend of $0.3125 per share and has a dividend yield of 9.00%, as recorded on December 4.
11. Dow Inc. (NYSE:DOW)
Number of Hedge Fund Holders: 39
Dividend Yield as of December 4: 5.35%
Dow Inc. (NYSE:DOW) is a multinational corporation that operates in the materials science industry. It specializes in the manufacturing and sale of a wide range of chemical, plastic, and agricultural products. On October 12, the company declared a quarterly dividend of $0.70 per share, which was in line with its previous dividend. The company has been paying regular dividends to shareholders since 1912, which makes DOW one of the best dividend stocks on our list. The stock’s dividend yield on December 4 came in at 5.35%.
At the end of September 2023, 39 hedge funds in Insider Monkey’s database owned stakes in Dow Inc. (NYSE:DOW), up from 37 in the previous quarter. The consolidated value of these stakes is over $1.38 billion.
10. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 40
Dividend Yield as of December 4: 9.20%
Altria Group, Inc. (NYSE:MO) is a Virginia-based multinational corporation primarily known for its involvement in the tobacco industry. It’s one of the world’s largest producers and marketers of cigarettes and other tobacco products. The company is a Dividend King with 54 consecutive years of dividend growth under its belt. It currently offers a quarterly dividend of $0.98 per share and has a dividend yield of 9.20%, as of December 4.
As of the close of Q3 2023, 40 hedge funds tracked by Insider Monkey owned investments in Altria Group, Inc. (NYSE:MO), compared with 43 in the preceding quarter. The overall value of these stakes is above $565 million. With over 9.6 million shares, Harris Associates was the company’s leading stakeholder in Q3.
9. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 42
Dividend Yield as of December 4: 6.37%
Kinder Morgan, Inc. (NYSE:KMI) is one of the largest energy infrastructure companies in North America, primarily focused on the transportation and storage of energy products. The company pays a quarterly dividend of $0.2825 per share and has been raising its dividends for six consecutive years. The stock has a dividend yield of 6.37%, as of December 4. KMI is among the best dividend stocks on our list with high yields.
Kinder Morgan, Inc. (NYSE:KMI) was a popular buy among elite funds during the third quarter of 2023, as the company ended the quarter with 42 hedge fund positions, up from 36 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of roughly $770 million.
8. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 42
Dividend Yield as of December 4: 4.18%
United Parcel Service, Inc. (NYSE:UPS) is a global package delivery and supply chain management company. It transports documents, packages, and freight both domestically and internationally. The company announced a quarterly dividend of $1.62 per share on November 1, which was consistent with its previous dividend. Overall, it holds a 21-year streak of consistent dividend growth, which makes UPS one of the best dividend stocks on our list. The stock has a dividend yield of 4.18%, as of December 4.
At the end of the third quarter of 2023, 42 hedge funds tracked by Insider Monkey reported having stakes in United Parcel Service, Inc. (NYSE:UPS), compared with 47 in the previous quarter. The total value of these stakes is over $1.83 billion. Viking Global was the company’s largest stakeholder among these hedge funds.
7. Crown Castle Inc. (NYSE:CCI)
Number of Hedge Fund Holders: 45
Dividend Yield as of December 4: 5.28%
Crown Castle Inc. (NYSE:CCI) is an American real estate investment trust company that specializes in owning, operating, and leasing shared communications infrastructure. The company offers a quarterly dividend of $1.565 per share and has a dividend yield of 5.28%, as of December 4. With the company’s dividend growth streak spanning over eight years, CCI is one of the best dividend stocks on our list.
Crown Castle Inc. (NYSE:CCI) was a part of 45 hedge fund portfolios at the end of Q3 2023, up from 41 in the previous quarter, according to Insider Monkey’s database. The collective value of stakes owned by these hedge funds is over $886.2 million.
6. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 52
Dividend Yield as of December 4: 6.62%
AT&T Inc. (NYSE:T) is a multinational telecommunications conglomerate that operates in various segments of the communications and media industry. The company pays a quarterly dividend of $0.2775 per share and has a dividend yield of 6.62%, as of December 4. It is one of the best dividend stocks on our list as the company has been paying uninterrupted dividends to shareholders since 1995.
At the end of September 2023, 52 hedge funds tracked by Insider Monkey owned investments in AT&T Inc. (NYSE:T), compared with 56 in the previous quarter. The collective value of these stakes is over $1.74 billion.
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Disclosure. None. 15 Best High Yield Stocks To Buy is originally published on Insider Monkey.