In this article, we will take a look at some of the best NASDAQ dividend stocks.
The NASDAQ, heavily comprised of technology stocks, has been on a consistent upward trajectory for some years. In 2023, it experienced remarkable growth, marking its best performance since 2020 with an increase of over 43%. In 2024, the index continued to surpass market expectations with a 28.64% gain. This impressive performance is largely driven by the excitement surrounding artificial intelligence, which has significantly boosted major tech stocks and the broader market throughout 2023 and into this year. Analysts suggest that the NASDAQ could be the index of the future, as its companies have shown a strong ability to adapt to evolving market trends.
NASDAQ’s consistent outperformance can be observed over several years. According to a report by Invesco, since January 1, 2008, the Nasdaq-100 Index has delivered a cumulative total return of 750%, significantly outpacing the broader market’s 315% return. This success is largely attributed to the innovation driven by tech companies, which continues to attract investors. For instance, the technology sector in the broader market has achieved an annualized total return of 20.65% over the past decade, compared to 12.80% for the market. This leadership is understandable given the rapid adoption of technology in recent years. The Industry Classification Benchmark (ICB) noted that the Nasdaq-100 has approximately 55% exposure to the tech sector, in contrast to about 32% for the broader market.
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Tech companies are not only driving innovation but are also swiftly adjusting their dividend strategies. In 2024, many prominent tech firms began issuing dividends, significantly boosting the overall dividend pool. Although dividends are traditionally linked with value stocks rather than the high-growth companies fueling the AI surge, analysts suggest this shift broadens the appeal of these stocks to new investor groups while putting surplus cash to use. Typically, growth-focused companies prioritize reinvestment over returning earnings to shareholders. However, experts like Ted Mortonson from Baird argue that these dividend payments won’t undermine the companies’ future dominance. Here are some other comments from the analyst:
“I don’t view it as a problem. I view it as they’ve won. They’ve won the technology side. They’ve won on the business-model side, and they’re going to win on the Gen AI cycle.”
Overall dividends are becoming increasingly popular among investors, with many US companies either raising or maintaining their payouts. Howard Silverblatt, a Senior Index Analyst at S&P Dow Jones Indices, suggested that with an anticipated reduction in interest rates by the FOMC in 2025, coupled with record earnings forecasted for the fourth quarter of 2024 and the entire year of 2025, companies might allocate more funds towards substantial dividend hikes in the upcoming year. He further mentioned that February, traditionally the peak month for dividend increases, is expected to see even more significant growth as some firms may look to compensate for previous conservative strategies. In 2024, the large-cap companies in the broader market outperformed many others, achieving record levels in earnings, sales, and dividends. For 2025, a projected 8% rise in dividend payments is expected, up from a 6.4% increase in 2024. Given this, we will take a look at some of the best NASDAQ dividend stocks.
Photo by Pascal Bernardon on Unsplash
Our Methodology:
For this list, we scanned Insider Monkey’s database of 900 hedge funds as of the third quarter of 2024 and selected companies that are trading on the NASDAQ exchange and also pay dividends to shareholders. From that list, we picked 15 stocks with the highest number of hedge fund investors and ranked in ascending order of hedge funds’ sentiment toward 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).
15. Automatic Data Processing, Inc. (NASDAQ:ADP)
Number of Hedge Fund Holders: 49
Automatic Data Processing, Inc. (NASDAQ:ADP) is a New Jersey-based management services company that offers payroll processing, tax administration, and human capital management services to its consumers. The company utilizes its cloud-based software and solutions to enable businesses to focus on growth while handling the complexities of workforce logistics.
With operations in 140 countries, Automatic Data Processing, Inc. (NASDAQ:ADP) processes payroll for one in six US workers and 16 million globally. This extensive client base has positioned the company as a leader in its industry, delivering operational efficiency and valuable economic insights from its aggregated workforce data. These insights, including wage benchmarks, offer businesses competitive intelligence, further enhancing the value of ADP’s services. The stock has surged by nearly 25% in the past 12 months.
In fiscal Q1 2025, Automatic Data Processing, Inc. (NASDAQ:ADP) reported strong earnings, with revenue totaling $4.8 billion, marking a 7% year-over-year increase. The company exceeded expectations in both revenue and margins, driven by robust growth in new business bookings, high client retention, and increased interest revenue from client funds.
In addition, ADP’s cash position also attracted investor attention, as the company ended the quarter with over $2.1 billion in cash and cash equivalents. Its total assets surpassed $49.5 billion. Operating cash flow rose significantly to $824.4 million, compared to $326.5 million in the same quarter of the previous year. Moreover, its trailing twelve-month levered free cash flow reached $2.6 billion.
Automatic Data Processing, Inc. (NASDAQ:ADP) recently achieved its Dividend King status, as the company has raised its payouts for 50 consecutive years. The company pays a quarterly dividend of $1.54 per share and has a dividend yield of 2.10%, as of January 15.
According to Insider Monkey’s database of Q3 2024, 49 hedge funds were bullish on Automatic Data Processing, Inc. (NASDAQ:ADP), compared with 52 in the previous quarter. The stakes held by these funds are worth over $3.5 billion in total.
14. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 51
CSX Corporation (NASDAQ:CSX) is an American transport company that mainly specializes in railroad operations. In recent weeks, CSX and the communities it serves have faced substantial challenges due to the impact of recent hurricanes. The stock has declined by over 6% in the past 12 months. That said, analysts remain hopeful about the company’s prospects, noting that a significant portion of CSX’s revenue is derived from domestic shipments. They anticipate growth in the company’s domestic operations as businesses increasingly look to source products within the US instead of relying on international manufacturers.
CSX Corporation (NASDAQ:CSX) is prioritizing enhancements in operational efficiency and service reliability. The company is utilizing advanced technologies like predictive maintenance and automated train operations to boost efficiency and cut operational expenses. In addition, it has adopted real-time data analytics to streamline its network, reduce transit durations, and enhance punctuality. By maintaining a high standard of service, CSX aims to seize growth opportunities, especially in the merchandise and intermodal sectors, where customers increasingly demand reliable and cost-efficient transport solutions. The sales and marketing team is also focused on shifting truck volumes to rail, particularly in the merchandise segment, which has experienced notable growth in chemicals, food, and forest products.
In the third quarter of 2024, CSX Corporation (NASDAQ:CSX) reported revenue of $3.62 billion, which showed a 1% growth from the same period last year. The company’s operating income came in at $1.35 billion, up 7% from the prior-year period. Its cash position also remained strong as the company ended the quarter with over $1.6 billion available in cash and cash equivalents, up from $1.35 billion at the end of December 2023. It generated nearly $4 billion in operating cash flow.
CSX Corporation (NASDAQ:CSX) is one of the best dividend stocks on our list as the company has been raising its payouts for 19 consecutive years. The company offers a quarterly dividend of $0.12 per share and has a dividend yield of 1.48%, as of January 15.
CSX Corporation (NASDAQ:CSX) was a part of 51 hedge fund portfolios at the end of Q3 2024, according to Insider Monkey’s database. The stakes owned by these funds are worth over $3 billion in total.
13. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 58
PepsiCo, Inc. (NASDAQ:PEP) is an American multinational food, snack, and beverage company. Over the past 12 months, the stock has declined by almost 13%. Despite this, the company remains a favorite among investors due to its dominant market position. It owns Frito-Lay, the largest producer of salty snacks globally, Pepsi, the second-largest nonalcoholic beverage brand, and Quaker Oats, a major player in the packaged food sector. With a vast global brand presence, strong marketing and innovation capabilities, and a solid financial base, the company is well-established as an industry leader and consolidator. For instance, its recent acquisition of Siete Foods strengthens its presence in the Mexican-American food market, particularly in salty snacks and packaged foods. Overall, PepsiCo is a resilient and well-established name in the consumer staples sector, known for its stability even during economic downturns.
In the third quarter of 2024, PepsiCo, Inc. (NASDAQ:PEP) reported robust earnings, with revenues exceeding $23.3 billion. Despite encountering obstacles like weaker performance in North America, product recalls at Quaker Foods North America, and geopolitical challenges in certain international markets, the company demonstrated resilience. Through effective cost management, it maintained profitability while making strategic investments to reinforce its market position.
PepsiCo, Inc. (NASDAQ:PEP)’s dividend history also makes it a reliable option for income investors. The company announced that it plans to distribute $8.2 billion through dividends and share buybacks in 2024. Moreover, the company is a Dividend King, with 52 consecutive years of dividend growth under its belt. It offers a quarterly dividend of $1.355 per share and has a dividend yield of 3.74%, as of January 15.
Insider Monkey’s database of Q3 2024 showed that 58 hedge funds held stakes in PepsiCo, Inc. (NASDAQ:PEP), compared with 65 in the previous quarter. These stakes have a total value of over $4.44 billion.
12. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 59
Gilead Sciences, Inc. (NASDAQ:GILD) is an American biopharmaceutical company, headquartered in California. The company is mainly known for developing innovative therapies for the treatment of various diseases. According to analysts, the company is poised for substantial growth, fueled by its innovative HIV prevention treatment, Lenacapavir, along with progress in its hepatitis and oncology drug pipelines. Lenacapavir, a revolutionary biannual injectable, effectively blocks HIV from infecting cells, showing remarkable efficacy. With FDA approval anticipated this year and global approvals likely soon after, the drug is expected to reach peak annual sales of $3 to $4 billion, well beyond the $2 billion annual revenue of GILD’s current HIV prevention drug, Descovy.
In the third quarter of 2024, Gilead Sciences, Inc. (NASDAQ:GILD) posted revenue of $7.55 billion, reflecting a 7% increase compared to the same quarter in the previous year. As of September 30, 2024, the company’s cash, cash equivalents, and marketable debt securities amounted to $5.0 billion, a decrease from $8.4 billion at the close of 2023. This reduction was primarily due to the $3.9 billion acquisition of CymaBay Therapeutics, Inc.
Polaris Capital Management highlighted Gilead Sciences, Inc. (NASDAQ:GILD) in its Q3 2024 investor letter. Here is what the firm has to say:
“U.S. biopharma/biotech companies topped the health care sector, with the majority of holdings posting returns in excess of 10%. Gilead Sciences, Inc. (NASDAQ:GILD) had two big announcements during the quarter: 1) the FDA approved its new liver disease treatment for biliary cholangitis and 2) its phase III HIV drug trial reduced new infections by 96% when compared to background HIV incidence, which could be a game changer for the disease.”
Gilead Sciences, Inc. (NASDAQ:GILD) is a solid dividend payer and has stable cash generation. In the most recent quarter, the company reported an operating cash flow of $4.3 billion. Moreover, it also paid $983 million to investors in dividends, which makes it one of the best dividend stocks on our list. The company’s quarterly dividend comes in at $0.77 per share for a dividend yield of 3.33%, as of January 15.
At the end of the third quarter of 2024, 59 hedge funds tracked by Insider Monkey held stakes in Gilead Sciences, Inc. (NASDAQ:GILD), down from 62 in the previous quarter. The consolidated value of these stakes is roughly $2.6 billion. With over 5 million shares, Citadel Investment Group was the company’s leading stakeholder in Q3.
11. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 60
Cisco Systems, Inc. (NASDAQ:CSCO) is a multinational American tech company specializing in networking hardware, software, and telecommunications equipment. In its latest quarterly earnings, the company noted that its clients are prioritizing critical infrastructure investments to support AI development. The company emphasized that its diverse range of products positions it well to capitalize on this trend. Cisco’s revenue, gross margin, and earnings per share all exceeded expectations, reaching the high end or surpassing the projected guidance, showcasing substantial operating leverage.
Cisco Systems, Inc. (NASDAQ:CSCO) posted solid earnings for fiscal Q1 2025, reporting revenues of $13.8 billion. While this represented a 6% decrease compared to the previous year, it exceeded analysts’ expectations by $70.5 million. Net income for the quarter was $2.7 billion, and the company maintained a strong financial position. In addition, it made significant strides in its development efforts, acquiring DeepFactor, Inc., a firm specializing in cloud-native application security, and Robust Intelligence, Inc., a company focused on AI security solutions. In the past 12 months, the stock has surged by nearly 19%.
In addition to its strong earnings, Cisco Systems, Inc. (NASDAQ:CSCO) showed a robust cash position, ensuring it can comfortably cover its dividend payments. In the latest quarter, the company generated $3.7 billion in operating cash flow, marking a 54% increase compared to the previous year. By the end of the quarter, it had $18.7 billion in cash and cash equivalents. Additionally, Cisco returned $1.6 billion to shareholders through dividend payments. It is one of the best dividend stocks on our list as the company has been rewarding shareholders with growing dividends for the past 17 years. Currently, it offers a quarterly dividend of $0.40 per share and has a dividend yield of 2.67%, as of January 15.
With a collective stake value of over $3 billion, 60 hedge funds tracked by Insider Monkey owned positions in Cisco Systems, Inc. (NASDAQ:CSCO) in Q3 2024. Among these hedge funds, Arrowstreet Capital was the company’s leading stakeholder in Q3.
10. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 63
Analog Devices, Inc. (NASDAQ:ADI) is an American semiconductor manufacturing company that specializes in integrated circuits and systems. The company caters to a wide variety of industries, including industrial, automotive, communications, and consumer sectors. It places a strong emphasis on innovation, investing heavily in research and development to stay ahead in technology. The company’s strategy focuses on prioritizing customers, expanding into new markets through acquisitions, and maintaining its leadership in analog solutions. The stock has delivered a 16% return to shareholders in the past 12 months.
Analog Devices, Inc. (NASDAQ:ADI) posted solid earnings for fiscal Q4 2024. It reported quarterly revenue of $2.44 billion, which, although down more than 10% year-over-year, exceeded analysts’ expectations by over $37.65 million. Its operating margins remained above 40%, reflecting the strength of its business model. The company also remained focused on making strategic, long-term investments in areas such as engineering, manufacturing, and enhancing the customer experience.
In addition to delivering solid earnings, Analog Devices, Inc. (NASDAQ:ADI) also maintains a strong cash position, which supports its ability to pay dividends consistently. In FY24, the company generated $3.9 billion in operating cash flow and $3.1 billion in free cash flow. It returned $2.4 billion to shareholders, with $1.8 billion allocated to dividends. The company has raised its dividend payouts for 20 straight years, which makes it one of the best NASDAQ dividend stocks on our list. The company pays a quarterly dividend of $0.92 per share and has a dividend yield of 1.69%, as of January 15.
Insider Monkey’s database of Q3 2024 indicated that 63 hedge funds owned stakes in Analog Devices, Inc. (NASDAQ:ADI), down from 64 a quarter earlier. These stakes have a total value of over $4.4 billion. With nearly 4 million shares, First Eagle Investment Management was the company’s leading stakeholder in Q4.
9. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 68
Amgen Inc. (NASDAQ:AMGN) is an American multinational biopharmaceutical company. Its MariTide has the potential to become a notable weight loss drug, and the company is also developing at least one other obesity treatment. These initiatives mark the early stages of Amgen’s expansion into the rapidly growing obesity market. Beyond weight loss, the company’s pipeline remains promising, particularly in the biosimilar sector. Recently, the company secured a legal victory, clearing the way to release a biosimilar of Regeneron’s Eylea, used to treat wet age-related macular degeneration, even as the two companies continue their patent dispute in court.
In the third quarter of 2024, Amgen Inc. (NASDAQ:AMGN) reported $8.5 billion in revenue, reflecting a 23.1% increase compared to the same quarter the previous year. The company experienced double-digit sales growth across ten products, including $1.2 billion from its rare disease treatments, driven by several innovative, early-stage medications. Amgen generated $3.3 billion in free cash flow during the quarter, up from $2.5 billion in Q3 2023. This growth was primarily due to strong business performance and favorable timing of working capital items, although it was somewhat offset by reduced interest income.
Amgen Inc. (NASDAQ:AMGN) currently pays a quarterly dividend of $2.38 per share, having raised it by 5.8% in December 2024. Through this increase, the company stretched its dividend growth streak to 13 years, which makes AMGN one of the best dividend stocks on our list. The stock’s dividend yield came in at 3.53%, as of January 15.
According to Insider Monkey’s database of Q3 2024, 68 hedge funds held stakes in Amgen Inc. (NASDAQ:AMGN), compared with 69 in the previous quarter. These stakes have a total value of more than $1.7 billion. Among these hedge funds, Two Sigma Advisors was the company’s leading stakeholder in Q3.
8. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 72
Comcast Corporation (NASDAQ:CMCSA) ranks eighth on our list of the best dividend stocks. The American telecommunications company offers a wide range of mobile phone and cable TV services. The company delivered strong earnings in Q3 2024, reporting $32.07 billion in revenue, a 7% increase from the same quarter the previous year. The company showed solid performance with a 3.6% rise in broadband average revenue per user (ARPU) and 5% growth in its connectivity segment. The Connectivity & Platforms division posted an adjusted EBITDA margin of 40.9%. Additionally, Comcast’s hosting of the Paris Summer Olympics significantly boosted Peacock’s revenue and subscriber base, further cementing NBC’s position as the top network for the 2023-2024 season.
Despite producing solid earnings, Comcast Corporation (NASDAQ:CMCSA) has fallen by over 15% in the past 12 months. One of the reasons for this decline is that the company encountered a setback, warning of an expected loss of over 100,000 broadband subscribers this quarter. This decline exceeds the total net loss from the first half of the year and reflects a worsening trend, following the 87,000 internet accounts lost in the third quarter.
Comcast Corporation (NASDAQ:CMCSA) maintained a strong cash position from a dividend perspective. In the latest quarter, it generated over $7 billion in operating cash flow, with free cash flow exceeding $3.4 billion. The company also returned $1.2 billion to shareholders through dividends. On January 7, it announced a quarterly dividend of $0.31 per share, consistent with its previous payouts. With 16 years of consecutive dividend growth, CMCSA is one of the best dividend stocks on our list. The stock supports a dividend yield of 3.40%, as of January 15.
Comcast Corporation (NASDAQ:CMCSA) also experienced a positive hedge fund sentiment in Q3 2024. 72 hedge funds tracked by Insider Monkey held stakes in the company in Q3, up from 61 in the preceding quarter. Their collective stake value is more than $5.44 billion. With over 31.8 million shares, First Eagle Investment Management was the company’s leading stakeholder in Q3.
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based semiconductor company that offers a wide range of wireless technology services. The company has established a solid presence in the smartphone chip industry and is well-positioned to capitalize on the rapidly expanding generative AI smartphone market. According to IDC, this market is projected to grow at an annual rate of 78% through 2028, with yearly shipments reaching 912 million units by the end of the period. Additionally, Counterpoint Research ranks the company as the second-largest player in the smartphone application processor market, holding a 31% market share. It is one of the best dividend stocks on our list as the stock delivered a nearly 17% return to shareholders in the past 12 months.
In fiscal Q4 2024, QUALCOMM Incorporated (NASDAQ:QCOM) reported impressive earnings, with revenues reaching $10.24 billion, marking an 18% increase compared to the same quarter the previous year. Net income surged 33% year-over-year to $3.5 billion. Additionally, the company achieved annual earnings per share growth of over 30% for fiscal 2024.
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) is a solid dividend payer because of its stable cash position. At the end of the quarter, the company had approximately $8 billion available in cash and cash equivalents. Its operating cash flow came in at $12.2 billion, up from $11.3 billion in the same period last year. During the quarter, it returned $2.2 billion to shareholders through dividends and share repurchases. Due to this cash position, the company was able to grow its payouts for 20 consecutive years. Currently, it offers a quarterly dividend of $0.85 per share for a dividend yield of 2.06%, as of January 15.
QUALCOMM Incorporated (NASDAQ:QCOM) was a part of 74 hedge fund portfolios at the end of Q3 2024, as per Insider Monkey’s database. The stakes owned by these funds are worth $3.23 billion in total.
6. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT) is a global leader in semiconductor equipment manufacturing, supplying critical tools for creating advanced chips used in AI, data centers, automotive technology, and other sectors. The global semiconductor manufacturing equipment market is projected to more than double by 2032, with Applied Materials likely to be a major beneficiary of this growth. Beyond just selling its equipment, the company has seen a significant boost in revenue from its equipment servicing segment. As manufacturing equipment becomes more complex and specialized, the demand for expert maintenance continues to rise, contributing to this fast-growing part of the business. In the past 12 months, the stock has surged by over 16%.
In the fourth quarter of 2024, Applied Materials, Inc. (NASDAQ:AMAT) reported revenue of $7.05 billion, which showed a 5% growth from the same period last year. The company’s net income for the quarter came in at $1.73 billion. Its diverse range of products and services strategically positions the company to support its customers in advancing AI and energy-efficient computing. As these critical areas of semiconductor innovation gain prominence, the industry’s progress increasingly relies on materials engineering, a field where Applied Materials holds a leading position.
Applied Materials, Inc. (NASDAQ:AMAT) also showed a strong cash position in FY24. The company reported an operating cash flow of $8.68 billion during the year. Its free cash flow amounted to $7.5 billion. Moreover, the company returned approximately $5.01 billion to shareholders, including $1.19 billion in dividends. It is one of the best dividend stocks on our list as the company has been growing its payouts for seven consecutive years. Currently, it offers a quarterly dividend of $0.40 per share and has a dividend yield of 0.89%, as of January 15.
Vltava Fund highlighted Applied Materials, Inc. (NASDAQ:AMAT) in its recently published Q4 2024 investor letter. Here is what the firm has to say:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 74 funds held stakes in Applied Materials, Inc. (NASDAQ:AMAT), compared with 77 in the previous quarter. The consolidated value of these stakes is over $4.6 billion.
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 75
Costco Wholesale Corporation (NASDAQ:COST) is an American retail company that offers a wide range of related products to its consumers. Analysts are optimistic about the company’s growth and past performance. They believe Costco has earned its premium over competitors by consistently gaining market share and building a retailing-as-a-service model that produces stable membership fees.
Costco Wholesale Corporation (NASDAQ:COST)’s retail strategy provides a strong and self-sustaining competitive advantage. By offering membership-based pricing and bulk item discounts, it is drawing in a steadily increasing base of loyal customers around the globe, as reflected in its recent quarterly earnings.
In the first quarter of fiscal 2025, Costco Wholesale Corporation (NASDAQ:COST) posted revenue of $62 billion, marking a 7.5% increase compared to the same quarter last year. The company’s net income rose to $1.8 billion, up from $1.6 billion in the previous year. Its cash position also remained strong, ending the quarter with nearly $11 billion in cash and cash equivalents, up from $9.9 billion in the prior quarter. In addition, the company generated $3.3 billion in operating cash flow.
Madison Investments made the following comment about Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2024 investor letter:
“Costco Wholesale Corporation (NASDAQ:COST) continues to demonstrate its commitment to sustainability by lowering its emissions. For example, it has converted its Kirkland Signature laundry packs from plastic tubs to a pouch. This has reduced plastic packaging by 80%. It has also moved to localize production of bulky items such as water, paper, and laundry detergents. Manufacturing these goods closer to the countries in which they are sold reduces emissions associated with shipping.”
Costco Wholesale Corporation (NASDAQ:COST) is one of the best dividend stocks as the company has been growing its payouts for 20 years running. Its quarterly dividend comes in at $1.16 per share for a dividend yield of 0.50%, as of January 15.
As per Insider Monkey’s database of Q3 2024, 75 hedge funds owned stakes in Costco Wholesale Corporation (NASDAQ:COST), up from 71 in the previous quarter. These stakes have a consolidated value of over $5.4 billion. Among these hedge funds, Chilton Investment Company was one of the company’s leading stakeholders in Q3.
4. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 76
Starbucks Corporation (NASDAQ:SBUX) ranks fourth on our list of the best NASDAQ dividend stocks. The American multinational chain of coffeehouses specializes in a wide range of coffee beverages. It delivered mixed earnings for fiscal Q4 2024, with revenue totaling $9.07 billion, reflecting a 3.2% decline from the previous year. However, its cash flow remained solid, with $6 billion in operating cash. The company also expanded its presence, adding 722 new stores, bringing the total to 40,199 locations. Of these, 52% are company-operated, while 48% are managed under licensing agreements.
Despite the economy, especially consumer spending, showing resilience amid ongoing uncertainty, Starbucks Corporation (NASDAQ:SBUX) has struggled to achieve similar success. The highly competitive and fragmented retail coffee market poses significant challenges. In the US, the top five coffee chains control less than half of the market, offering consumers plenty of alternatives. With no significant switching barriers, customers can easily choose other options, leaving the company with little margin for error—an issue that seems to be affecting its performance. The stock has surged by just 0.5% in the past 12 months.
Starbucks Corporation (NASDAQ:SBUX)’s dividend keeps it in a safe spot among investors. The company holds a 14-year track record of consistent dividend growth and currently offers a quarterly dividend of $0.61 per share. Its dividend yield on January 15 came in at 2.62%.
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.”
The number of hedge funds tracked by Insider Monkey holding stakes in Starbucks Corporation (NASDAQ:SBUX) grew to 76 in Q3 2024, from 70 in the previous quarter. These stakes have a consolidated value of over $3.2 billion. With over 11.7 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
3. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) is a California-based multinational semiconductor company that offers a wide range of semiconductor and infrastructure software products. The company recently announced its Q4 2024 earnings, posting $14.05 billion in revenue, marking a significant increase of more than 51% from the same quarter the previous year. Semiconductor revenue reached an all-time high of $30.1 billion, with AI revenue contributing $12.2 billion, reflecting a 220% year-over-year surge. This impressive growth in AI revenue was largely driven by the company’s cutting-edge AI XPUs and Ethernet networking solutions. For the fiscal year 2024, adjusted EBITDA climbed by 37% compared to the previous year, setting a new record at $31.9 billion.
Broadcom Inc. (NASDAQ:AVGO) is grabbing investors’ attention as the company plays a crucial role in powering products across various sectors, from data centers to smartphones. Impressively, more than 99% of all internet traffic flows through its technology, underscoring its leadership in networking. In addition, the acquisition of cloud virtualization firm VMware, completed a year ago, has bolstered Broadcom’s position. VMware’s operating margin has climbed to 70%, and Broadcom is on course to surpass its goal of achieving an adjusted EBITDA of over $8.5 billion within three years.
Broadcom Inc. (NASDAQ:AVGO) currently offers a quarterly dividend of $0.59 per share and has a dividend yield of 1.04%, as of January 15. It is one of the best dividend stocks on our list as the company has been growing its payouts for 14 consecutive years. The company’s cash reserves enabled it to achieve this dividend growth. In the most recent quarter, it generated $5.6 billion in operating cash flow and its free cash flow amounted to $5.48 billion. This cash flow accounted for 39% of the company’s revenue.
Insider Monkey’s database of Q3 2024 indicated that 128 hedge funds, down from 130 in the previous quarter, owned stakes in Broadcom Inc. (NASDAQ:AVGO). These stakes have a total value of more than $14.5 billion.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is an American multinational tech giant that offers a wide range of related products and services to its consumers. With 2.2 billion Apple devices worldwide, the company has a vast platform for introducing its AI services. Several new Apple Intelligence features are slated for 2025, including enhancements to Siri that will make it easier for users to locate messages and share files and photos. In addition, the company could explore AI-driven subscription services, opening up further revenue potential.
In the fourth quarter of 2024, Apple Inc. (NASDAQ:AAPL) posted a revenue of $94.9 billion, marking a 6% increase compared to the same quarter the previous year. Product revenue reached nearly $70 billion, up from $67 billion in the same period in 2023. Street analysts expect a robust 2025 for the company, forecasting a 6% growth rate. Notably, earnings per share (EPS) are expected to rise by 21.5%, fueled by enhanced profitability margins from Apple’s wide range of high-growth services. The upcoming quarters, particularly the holiday shopping season, will play a pivotal role in assessing the initial impact of Apple Intelligence.
Parnassus Investments mentioned AAPL in its Q3 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) shares rose during the quarter, making our underweight position a relative detractor. Investors reacted positively to the new iPhone 16 lineup and its advanced features, including generative artificial intelligence, greater durability and increased processing power.”
In addition to strong performance and positive outlook, Apple Inc. (NASDAQ:AAPL)’s cash position also makes it an attractive opportunity for investors. In the most recent quarter, the company reported an operating cash flow of $27 billion and paid $29 billion to shareholders. Currently, it pays a quarterly dividend of $0.25 per share and has a dividend yield of 0.42%, as of January 15.
As of the end of Q3 2024, 158 hedge funds owned stakes in Apple Inc. (NASDAQ:AAPL), according to Insider Monkey’s database. These stakes have a total value of roughly $110 billion. With 300 million shares, Berkshire Hathaway was the company’s leading stakeholder in Q3.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American multinational tech conglomerate. Its achievement stems from its unmatched leadership within the enterprise ecosystem, driven by its strategic emphasis on providing integrated solutions designed specifically for business needs. The company’s Intelligent Cloud segment, driven by Azure, has become the company’s primary growth driver, generating $91 billion of its $211 billion revenue in FY2024, accounting for 43% of the total. With a 22% share of the global cloud market, Azure ranks as the second-largest provider after AWS. Its hybrid cloud features, which effectively merge on-premises and cloud-based systems, have set it apart, particularly for enterprise customers. The segment’s 67% gross margin highlights the scalability and profitability of Microsoft’s cloud services, making it a central component of the company’s overall business strategy.
In fiscal Q1 2025, Microsoft Corporation (NASDAQ:MSFT) reported revenue of $65.6 billion, which showed a 16% growth from the same period last year. The company’s operating income came in at $30.6 billion, up 14% from the prior-year period. In addition, its revenue from server products and cloud services rose by 23%, primarily fueled by a 33% increase in Azure and other cloud services.
Microsoft Corporation (NASDAQ:MSFT)’s cash position also came in strong. The company ended the quarter with over $20.8 billion available in cash and cash equivalents, up from $18.3 billion in the same quarter last year. It generated over $34 billion in operating cash flow, growing from $30.5 billion in Q1 2024. This cash generation enabled the company to return $9 billion to shareholders through dividends and share repurchases.
On December 4, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.83 per share, which was in line with its previous dividend. It is one of the best dividend stocks on our list as the company has been growing its payouts for 19 consecutive years. The stock has a dividend yield of 0.78%, as of January 15.
At the end of Q3 2024, 279 hedge funds tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), the same as in the previous quarter. These stakes have a total value of more than $91 billion. Among these hedge funds, Bill & Melinda Gates Foundation Trust was the company’s leading stakeholder in Q3.
Overall, Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of the best NASDAQ dividend stocks. While we acknowledge the potential for MSFT 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 MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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