In this article, we will take a look at some of the best stocks with steady dividends.
Dividend stocks, while popular among investors, have been underperforming for a while. Dan Lefkovitz, a strategist at Morningstar Indexes, attributed this lag to a straightforward reason: their limited exposure to the technology sector. Although technology wasn’t the top-performing sector in 2024, it came close and now represents a significant portion of the market.
However, this doesn’t suggest that dividend stocks are fundamentally weak or that they won’t rebound in the future. Alex Bryan, Morningstar’s director of product management for equity indexes, believes that changing market dynamics could benefit dividend investors. Here are some comments from the analyst:
“From a valuation standpoint, dividends look more attractive than they did a year ago, and that’s partially because of the relative underperformance that they’ve had. Bonds are certainly more competitive relative to dividends. But if you look at dividend-paying stocks relative to the rest of the equity markets, I think they’re becoming more attractive relative to other stocks.”
Other analysts also suggested that dividend-paying stocks might stage a comeback in 2025 due to growing investor demand for cash returns. The broader market’s dividend yield fell below 1.19% in 2024, marking a 20-year low, compared to its long-term average of 4.3%. With interest rates recovering on risk-free investments like Treasurys, companies are facing increased competition for yield. As a result, many are raising dividends or initiating them for the first time. Notably, some major tech giants began paying dividends in 2024, signaling to the market their shift toward value positioning within a high-growth sector.
Also read: 10 Best High-Yield Dividend Stocks To Invest In
In 2024, companies in the broader market that paid dividends returned around 35% of their net income and 45% of their free cash flow to shareholders, as reported by Bloomberg. The average dividend yield for these companies was approximately 2.3%, while the market capitalization-weighted yield stood at about 1.5%.
Wolfe Research’s Chief Investment Strategist, Chris Senyek, offers a unique perspective on investing in dividend stocks. While investors typically focus on companies with growing dividends and high yields, Senyek suggested exploring other opportunities. He highlighted companies initiating dividends for the first time and those that have recently reduced their payouts. Initiating a dividend indicates management’s confidence in maintaining steady earnings and cash flow, while also attracting a new group of investors.
Senyek also noted that shares of companies that cut dividends tend to underperform leading up to the cut, perform in line with the market shortly after, and begin to outperform about six months later. The key is to identify companies that may be at risk of cutting dividends and to reconsider those that reduced payouts a few months earlier. To forecast potential cuts, Senyek examines companies with high dividend yields, substantial debt, and elevated payout ratios. For potential new dividend payers, Senyek seeks out companies with robust free cash flow yields that are actively repurchasing shares and maintaining manageable debt levels. In view of this, we will take a look at stocks with steady dividends.
Our Methodology:
For this article, we scanned Insider Monkey’s database of 900 hedge funds as of Q3 2024 and picked dividend stocks with over 10 consecutive years of dividend growth. From this list, we further refined our selection criteria by identifying stocks with a projected upside potential of over 10% based on analyst price targets, as of January 20. The stocks are ranked according to their upside potential. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
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. Medtronic plc (NYSE:MDT)
Upside Potential as of January 20: 10.3%
Medtronic plc (NYSE:MDT) is a medical device company that has a diversified business, offering a wide range of devices across four key sectors: medical-surgical, neuroscience, cardiovascular, and diabetes. The company reported strong earnings in its fiscal Q1 2025. Its revenue came in at $8.4 billion, up 5.3% from the same period last year. The company reported $686 million in diabetes revenue for the quarter, reflecting a 12.4% year-over-year growth. This increase was fueled by a double-digit rise in international revenue, attributed to higher adoption rates of continuous glucose monitoring (CGM) devices and the continued rollout of the Simplera Sync sensor.
Since the start of 2025, Medtronic plc (NYSE:MDT) has surged by nearly 10%. Earlier this year, the company secured US approval for its Simplera continuous glucose monitoring (CGM) system. In addition, it entered into a partnership with Abbott Laboratories, a prominent player in the CGM market. Under this collaboration, Abbott will supply a CGM system compatible with Medtronic’s devices, which Medtronic will exclusively distribute. This partnership underscores Medtronic’s commitment to innovation and enhancing its diabetes division.
Matrix Asset Advisors made the following comment about MDT in its Q3 2024 investor letter:
“In Q3, we added to two Healthcare positions, Medtronic plc (NYSE:MDT) and Becton Dickinson (BD). Both companies are very attractive in our valuation analysis. We started the LCV position in MDT in the second quarter and added to it as more cash became available. The company’s business results have improved this year as the number of medical procedures normalized from their decline during the pandemic. “
Medtronic plc (NYSE:MDT) is one of the best stocks with steady dividends as the company has a strong cash position. In the first six months of its fiscal year, the company generated nearly $2 billion in operating cash flow, which grew from $1.5 billion in the prior-year period. Its free cash flow of $1.02 billion also showed a growth from $721 million in the same quarter last year. This cash position allowed the company to raise its payouts for 47 years in a row. Currently, it pays a quarterly dividend of $0.70 per share and has a dividend yield of 3.18%, as of January 20.
The number of hedge funds tracked by Insider Monkey owning stakes in Medtronic plc (NYSE:MDT) grew to 60 in Q3 2024, from 52 in the previous quarter. These stakes are collectively valued at over $4.2 billion.
14. Starbucks Corporation (NASDAQ:SBUX)
Upside Potential as of January 20: 10.48%
Starbucks Corporation (NASDAQ:SBUX) is a Washington-based multinational chain of coffeehouses and roastery reserves that specializes in a wide range of coffee beverages. The stock has gained just a little over 2% in the past 12 months as the company faced difficulties despite the economy and consumer spending demonstrating resilience in uncertain times. The competitive and fragmented nature of the retail coffee market presents considerable obstacles. In the US, the top five coffee chains hold less than half of the market, providing consumers with numerous alternatives. With minimal switching barriers, customers can easily opt for other options, leaving the company with little room for mistakes, which appears to be impacting its performance.
In the first half of the year, Starbucks Corporation (NASDAQ:SBUX) experienced a slowdown in sales, with some decline in performance. Both customers and employees attributed this to operational issues, including an extensive menu and a surge in mobile orders. In addition, the company faced pressure from two activist investors who acquired stakes in Starbucks during the summer. However, in August, Starbucks surprised investors by announcing that Brian Niccol would assume the role of CEO, a move that generated optimism about the company’s future. This leadership change was anticipated to bring positive outcomes, and the company did exhibit some improvements in its most recent quarter.
Starbucks Corporation (NASDAQ:SBUX) reported $9.07 billion in revenues in the fourth quarter of 2024, which fell slightly by 3.2% from the same period last year. However, the company maintained strong cash flow, generating $6 billion in operating cash. The company also broadened its footprint by opening 722 new stores, increasing its total to 40,199 locations. Of these, 52% are company-owned, while 48% operate under licensing agreements.
Starbucks Corporation (NASDAQ:SBUX) is also popular among investors because of its dividend. The company has been raising its payouts for 14 consecutive years, which makes SBUX one of the best stocks with steady dividends. Currently, it pays a quarterly dividend of $0.61 per share and has a dividend yield of 2.56%, as of January 20.
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.”
At the end of Q3 2024, 76 hedge funds tracked by Insider Monkey held stakes in Starbucks Corporation (NASDAQ:SBUX), growing from 70 in the previous quarter. These stakes are worth over $3.2 billion in total. With over 11.7 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
13. Bristol-Myers Squibb Company (NYSE:BMY)
Upside Potential as of January 20: 10.7%
Bristol-Myers Squibb Company (NYSE:BMY) is a New York-based pharmaceutical industry company. It is facing some challenges, but management is actively addressing them. Efforts are underway to reduce costs, with an aim to cut approximately $1.5 billion in expenses annually by the end of 2025. In addition, the company intends to maintain its focus on research and development (R&D) in oncology, targeting areas that management expects will yield the highest returns on investment, helping to drive growth while managing expenses.
As a result of these initiatives, Bristol-Myers Squibb Company (NYSE:BMY) is gaining favor with analysts. They believe it is well-positioned for growth as it approaches a critical period, with outcomes from 40 clinical trials on the horizon. By 2025, five new products are anticipated to contribute at least half of the company’s revenue, marking the beginning of substantial growth. A notable asset in its pipeline is Cobenfy, a schizophrenia treatment that has already outperformed other branded options in the market, showing significant commercial promise.
In addition to this, Bristol-Myers Squibb Company (NYSE:BMY) is also popular among investors because of its stable dividend policy. The company’s cash position is strong, as it generated $15 billion in operating cash flow in the past 12 months and its levered free cash flow for the period came in at $17.5 billion. Due to this cash flow, the company has never skipped a dividend in the past 93 years and has raised its payouts for 16 consecutive years. It currently offers a quarterly dividend of $0.62 per share and has a dividend yield of 4.33%, as of January 20.
As of the close of Q3 2024, 70 hedge funds in Insider Monkey’s database owned stakes in Bristol-Myers Squibb Company (NYSE:BMY), growing from 61 in the previous quarter. These stakes have a consolidated value of over $3.3 billion.
12. Union Pacific Corporation (NYSE:UNP)
Upside Potential as of January 20: 10.88%
Union Pacific Corporation (NYSE:UNP) is an American transport company, headquartered in Nebraska. The company operates railroads, connecting 23 states. It is focusing on increasing mainline and terminal capacities by building new sidings and extending existing ones. These efforts are especially critical in growth regions like the Pacific Northwest, where the company is improving its handling of soda ash and grain exports, and the Southwest, where it is enhancing intermodal services. Moreover, the company is investing in advanced technologies like GPS tracking for containers and rail pulse systems to improve service reliability and provide customers with real-time tracking and better communication. The stock has surged by nearly 3% since the start of 2025.
In the third quarter of 2024, Union Pacific Corporation (NYSE:UNP) reported $6.01 billion in revenue, which saw a modest 1% rise compared to the same period last year. Freight revenue, excluding fuel surcharges, saw a 5% increase, driven by a 6% growth in revenue carloads. The company’s operating income also experienced an 11% boost, reaching $2.4 billion.
Union Pacific Corporation (NYSE:UNP)’s cash position also remained strong for FY24. In the first nine months of the year, the company posted an operating cash flow of $6.7 billion, which showed a growth from $5.9 billion in the same quarter last year. Free cash flow saw a notable increase, climbing to $1.8 billion from $955 million the previous year. The company has been a generous dividend payer, providing regular payouts to shareholders for the past 125 years. Moreover, it also maintains an 18-year track record of consistently growing its payouts, which makes UNP one of the best stocks with steady dividends. Its quarterly dividend comes in at $1.34 per share for a dividend yield of 2.27%, as of January 20.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 78 funds held stakes in Union Pacific Corporation (NYSE:UNP), compared with 82 in the previous quarter. These stakes have a total value of over $4.48 billion. With over 6.2 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
11. PepsiCo, Inc. (NASDAQ:PEP)
Upside Potential as of January 20: 13.23%
An American multinational food, snack, and beverage company, PepsiCo, Inc. (NASDAQ:PEP) ranks eleventh on our list of the best stocks with steady dividends. The stock has faced significant pressure throughout 2024 as investors gravitated toward higher-growth opportunities, further impacted by external challenges such as deglobalization and concerns about the adoption of GLP-1 drugs. These issues have led to a 10% decline in the past 12 months, with shares now at their lowest since mid-2021, despite a more than 15% increase in revenue.
That said, PepsiCo, Inc. (NASDAQ:PEP) boasts a broad range of well-known brands, including Pepsi, Mountain Dew, Gatorade, Lay’s, Doritos, and Quaker. With its extensive global presence, robust marketing and innovation strengths, and a strong financial foundation, it stands as a leading force in the industry. By focusing on regular price hikes, global expansion, and strategic acquisitions, the company has achieved consistent growth in both revenue and profit, despite being seen as a defensive, slower-growth stock. This resilience, along with its ability to withstand inflation, positions PepsiCo as a dependable investment during economic downturns.
PepsiCo, Inc. (NASDAQ:PEP)’s dividend history also makes it a reliable investment option for income investors. The company announced that it aims to distribute $8.2 billion through dividends and share buybacks in FY24. In addition, it is a Dividend King, having raised its payouts for 52 consecutive years. The company offers a quarterly dividend of $1.355 per share and has a dividend yield of 3.63%, as of January 20.
PepsiCo, Inc. (NASDAQ:PEP) was included in 58 hedge fund portfolios at the end of Q3 2024, compared with 65 in the previous quarter, according to Insider Monkey’s database. The stakes held by these funds have a total value of more than $4.44 billion.
10. McDonald’s Corporation (NYSE:MCD)
Upside Potential as of January 20: 14.8%
McDonald’s Corporation (NYSE:MCD) is an American multinational fast food company. It faced some challenges last year and analysts suggest that while the company has previously managed to pass increased costs onto customers, there is now more resistance, making growth less straightforward. In the quarter ending September 30, 2024, global comparable sales declined by 1.5%, and even in its primary US market, the growth was minimal at only 0.3%. To attract customers again, the company might need to adopt more competitive pricing strategies. However, while this approach could potentially drive sales, it could also lead to reduced margins and lower profits.
Despite the challenges, the company boasts a robust portfolio capable of withstanding various economic climates. McDonald’s Corporation (NYSE:MCD) continues to be a powerhouse in the fast-food sector, with more than 40,000 outlets in over 100 countries. Renowned for its signature menu and dedication to quality, convenience, and affordability, it has become a staple in households worldwide. Its emphasis on innovation through digital ordering, delivery services, and sustainability initiatives aligns with shifting consumer trends, reinforcing its position as a leader in the growing fast-food industry.
McDonald’s Corporation (NYSE:MCD) further solidifies its status as a solid investment through its reliable dividend, underscoring its financial strength and commitment to returning value to shareholders. The company has raised its payouts for 48 years and running, which makes it one of the best stocks with steady dividends. It offers a quarterly dividend of $1.77 per share and has a dividend yield of 2.53%, as of January 20.
As per Insider Monkey’s database of Q3 2024, 60 hedge funds held stakes in McDonald’s Corporation (NYSE:MCD), compared with 67 in the previous quarter. These stakes are worth over $2.37 billion in total. Among these hedge funds, Adage Capital Management was the company’s leading stakeholder in Q3.
9. Johnson & Johnson (NYSE:JNJ)
Upside Potential as of January 20: 14.93%
Johnson & Johnson (NYSE:JNJ) is a New Jersey-based pharmaceutical company that specializes in a wide range of biotech and medical products and offers related services to consumers. Analysts believe the stock is a worthwhile investment due to its future earnings potential. After divesting its consumer health division in 2023, the company has shifted its focus entirely to its pharmaceuticals and medtech sectors, which offer significant growth opportunities. The pharmaceuticals segment, known as innovative medicine, features 11 major brands experiencing double-digit growth. In the medtech area, the company is moving into high-growth markets, bolstered by the acquisitions of Shockwave and Abiomed. These strategic moves have positioned J&J as a leader in four key cardiovascular intervention markets. Since the start of 2025, the stock has surged by nearly 3%.
In addition, Johnson & Johnson (NYSE:JNJ) is attracting attention for its ongoing innovation and recent acquisitions. The company recently announced plans to invest over $14 billion in acquiring Intra-Cellular Therapies to strengthen its focus on central nervous system disorders. The acquisition will be financed through a mix of cash reserves and debt, with the deal expected to close later this year. This move marks the largest biotech acquisition in over a year, signaling a resurgence in healthcare mergers and acquisitions after a 2024 slowdown, as major pharmaceutical companies took time to integrate their previous post-pandemic purchases.
Johnson & Johnson (NYSE:JNJ) is a strong dividend payer as the company has raised its payouts for 62 years. The company pays a quarterly dividend of $1.24 per share and has a dividend yield of 3.35%, as of January 20. With an upside potential of nearly 15%, JNJ is one of the best stocks with steady dividends.
As of the close of Q3 2024, 81 hedge funds tracked by Insider Monkey reported having stakes in Johnson & Johnson (NYSE:JNJ), up from 80 in the previous quarter. These stakes are collectively valued at over $5.4 billion.
8. AbbVie Inc. (NYSE:ABBV)
Upside Potential as of January 20: 18.03%
AbbVie Inc. (NYSE:ABBV) is an Illinois-based biopharmaceutical company that specializes in the development and commercialization of advanced therapies and treatments in various areas of healthcare. The company continues to be a key player in the pharmaceutical industry, supported by a strong portfolio of existing products and promising candidates in its pipeline. One standout is Tavapadon, a treatment for Parkinson’s disease, which recently achieved significant milestones in a late-stage study, offering hope for ABBV’s neuroscience initiatives.
Although pharmaceutical stocks have encountered difficulties in 2024, largely due to political concerns over drug pricing, AbbVie Inc. (NYSE:ABBV)’s focus on creating new, innovative treatments has positioned it strongly. The Inflation Reduction Act, which limits price increases, has pushed companies to prioritize innovation instead of relying on price hikes. The company’s successful efforts to diversify its portfolio in recent years have positioned the company for substantial growth moving forward. In the past 12 months, the stock has surged by nearly 5%.
In the third quarter of 2024, AbbVie Inc. (NYSE:ABBV) reported revenue of $14.46 billion, which saw a 4% increase from the same period last year. Its Immunology Portfolio generated over $7 billion, also growing by 4%. Moreover, in August 2024, AbbVie completed an $8.7 billion acquisition of Cerevel Therapeutics, a neuroscience company.
While AbbVie Inc. (NYSE:ABBV) primarily focuses on immunology, oncology, inflammation, and eye care, its recent move into neuroscience has opened up additional growth opportunities, helping to diversify its revenue streams. For investors, the key focus should be on AbbVie’s robust pipeline in these other areas, which holds potential for future growth, regardless of how its neuroscience efforts unfold.
AbbVie Inc. (NYSE:ABBV) is one of the best stocks with steady dividends as the company has been rewarding shareholders with growing dividends for the past 52 years. The company pays a quarterly dividend of $1.64 per share and has a dividend yield of 3.79%, as of January 20.
At the end of the third quarter of 2024, 68 hedge funds tracked by Insider Monkey held stakes in AbbVie Inc. (NYSE:ABBV), up from 67 in the preceding quarter. These stakes are collectively valued at roughly $2.6 billion. With over 1.7 million shares, AQR Capital Management was the company’s leading stakeholder in Q3.
7. Exxon Mobil Corporation (NYSE:XOM)
Upside Potential as of January 20: 18.7%
Exxon Mobil Corporation (NYSE:XOM) ranks seventh on our list of the best stocks with steady dividends. The American oil and gas company is engaged in the exploration, production, refining, and distribution of petroleum products.
Though Exxon Mobil Corporation (NYSE:XOM) is a dominant force in the global fossil fuel industry, it is also increasing its focus on lower-carbon energy investments. The company recently outlined its 2030 vision, which includes targeting up to $30 billion in low-emission projects between 2025 and 2030. Exxon has also secured the largest offshore carbon dioxide storage site in the US through an agreement with the Texas General Land Office. In addition, the company is developing what would be the world’s largest low-carbon hydrogen production facility, capable of producing up to 1 billion cubic feet of hydrogen daily.
Exxon Mobil Corporation (NYSE:XOM) reported $90.02 billion in revenues in the third quarter of 2024, exceeding analysts’ expectations by $1.66 billion. The company also posted strong financial results, generating $17.6 billion in operating cash flow and $11.3 billion in free cash flow for the quarter. It also returned $9.8 billion to shareholders via dividends and stock buybacks. This cash flow enabled the company to grow its payouts for 42 years in a row. The company pays a quarterly dividend of $0.99 per share and has a dividend yield of 3.56%, as of January 20.
Insider Monkey’s database of Q3 2024 indicated that 86 hedge funds owned stakes in Exxon Mobil Corporation (NYSE:XOM), compared with 92 a quarter earlier. These stakes have a total value of nearly $7 billion. First Eagle Investment Management was one of the company’s leading stakeholders.
6. Pfizer Inc. (NYSE:PFE)
Upside Potential as of January 20: 20.01%
Pfizer Inc. (NYSE:PFE) is a global pharmaceutical company that mainly manufactures, markets, and sells related products worldwide. Leveraging its pandemic profits, the company acquired Seagen for $43 billion in late 2023 to strengthen its oncology pipeline. The company is likely to keep seeking acquisitions of promising pharmaceutical firms to further enhance its pipeline. This approach is proving effective, with management projecting earnings growth of 10% to 18% for 2025. Analysts anticipate the company’s earnings to grow by approximately 14% annually over the next three to five years.
Pfizer Inc. (NYSE:PFE) attracted significant investor attention in 2020 by being the first to launch a COVID-19 vaccine in the US, outpacing Moderna. Beyond its vaccine, the company’s diverse product lineup includes treatments for autoimmune conditions, cancer, migraines, and more. Analysts suggested that the company’s growth potential might be underestimated. It has heavily invested in research and development and made strategic acquisitions, enhancing its portfolio with key products such as the RSV vaccine Abrysvo, the migraine treatment Nurtec ODT, and cancer therapies Adcetris and Padcev.
In the third quarter of 2024, Pfizer Inc. (NYSE:PFE) reported revenue of $17.7 billion, reflecting a substantial 32% increase compared to the same period the previous year. The company effectively addressed the heightened 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) is a strong dividend payer as the company holds a 15-year streak of consistent dividend growth. The company currently pays a quarterly dividend of $0.43 per share and has a dividend yield of 6.5%, as of January 20.
As of the end of Q3 2024, 80 hedge funds in Insider Monkey’s database owned stakes in Pfizer Inc. (NYSE:PFE), compared with 84 in the previous quarter. The consolidated value of these stakes is over $3 billion.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Upside Potential as of January 20: 20.3%
QUALCOMM Incorporated (NASDAQ:QCOM) is an American semiconductor company that offers a wide range of wireless technology services. In fiscal Q4 2024, the company delivered strong financial results, with revenues climbing to $10.24 billion, an 18% increase from the same quarter the previous year. Net income rose 33% year-over-year, reaching $3.5 billion. The company also posted an annual earnings per share growth exceeding 30% for fiscal 2024.
QUALCOMM Incorporated (NASDAQ:QCOM) has built a strong foothold in the smartphone chip industry and is well-poised to benefit from the fast-growing generative AI smartphone market. IDC projects this market to expand at an annual rate of 78% through 2028, with annual shipments expected to hit 912 million units by that time. Furthermore, Counterpoint Research places the company as the second-largest in the smartphone application processor market, commanding a 31% market share. Since the start of 2025, the stock has surged by over 9%.
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.”
In addition to its innovations and efforts to expand its portfolio, QUALCOMM Incorporated (NASDAQ:QCOM) is also known for its strong dividend policy. The company has sufficient cash to fund its dividend payments. It ended the quarter with $8 billion available in cash and cash equivalents. The company generated an operating cash flow of $12.2 billion, up from $11.3 billion in the prior-year period. It also remained committed to returning value to shareholders, paying $2.2 billion to investors in dividends. It is one of the best stocks with steady dividends as the company has raised its payouts for 20 years straight. It currently pays a quarterly dividend of $0.85 per share and has a dividend yield of 2.03%, as of January 20.
According to Insider Monkey’s database of Q3 2024, 74 hedge funds owned stakes in QUALCOMM Incorporated (NASDAQ:QCOM), worth $3.23 billion in total.
4. NIKE, Inc. (NYSE:NKE)
Upside Potential as of January 20: 21.3%
NIKE, Inc. (NYSE:NKE) is an American footwear and apparel company, based in Oregon. It company that offers products for men, women, and children. The company continues to lead the global sportswear market, holding an impressive 16.4% share, as reported by Euromonitor. This strong position is the result of decades of effective brand-building and exceptional marketing efforts since its establishment in 1964.
NIKE, Inc. (NYSE:NKE) continues to support its global brand through outstanding marketing and storytelling, supported by endorsements from top athletes like LeBron James and Cristiano Ronaldo, along with key partnerships, such as its extended agreement with the NFL to remain the exclusive uniform provider until 2038. The company is also known for its innovative products that attract a broad consumer base.
In fiscal Q2 2025, NIKE, Inc. (NYSE:NKE) reported mixed results, with revenue at $12.35 billion, reflecting a 7.7% decrease from the same quarter the previous year. Wholesale revenues declined by 3% year-over-year, totaling $6.9 billion. Inventory levels remained steady at $8.0 billion, with higher unit volumes balanced by reduced input costs and changes in the product mix.
Despite these challenges, NIKE, Inc. (NYSE:NKE)’s financial stability remains strong, making it an attractive option for income investors. The company concluded the quarter with $7.9 billion in cash and cash equivalents, a 1% increase from the same period last year. It returned $1.6 billion to shareholders through dividends and share buybacks. With a consistent track record of 23 years of dividend growth, NIKE is one of the best stocks for steady dividends. The company currently offers a quarterly dividend of $0.40 per share, yielding 2.20% as of January 20.
The number of hedge funds tracked by Insider Monkey owning stakes in NIKE, Inc. (NYSE:NKE) at the end of Q3 2024 jumped to 75, from 66 in the previous quarter. These stakes have a collective value of over $5 billion.
3. Merck & Co., Inc. (NYSE:MRK)
Upside Potential as of January 20: 26.6%
Merck & Co., Inc. (NYSE:MRK) is an American pharmaceutical company that offers innovative health solutions to its consumers. The company is making notable progress in diversifying its pipeline. Initially, it anticipated $35 billion in additional revenue from its new drug portfolio at the beginning of 2024, but that estimate has now risen to $50 billion. This increase is largely fueled by a substantial expansion in its clinical trials, with 26 phase III trials currently underway, up from nine in 2021. Some of these trials could yield blockbuster drugs, particularly in the area of HIV treatments. Merck has also collaborated with Gilead Sciences on a combination therapy that holds the potential to transform HIV treatment.
In addition, Merck & Co., Inc. (NYSE:MRK) has solidified its reputation as a frontrunner in specialty pharmaceuticals and oncology, with its flagship cancer drug, Keytruda, transforming treatment approaches and significantly boosting revenue. The company’s strong market position ensures substantial cash flow, which is used to deliver returns to shareholders. In the latest quarter, Keytruda’s sales grew by 17% year-over-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.”
Merck & Co., Inc. (NYSE:MRK) is one of the best stocks with steady dividends as the company has been rewarding shareholders with growing dividends for the past 14 years. Its quarterly dividend currently sits at $0.81 per share and has a dividend yield of 3.36%, as of January 20.
Merck & Co., Inc. (NYSE:MRK) was included in 86 hedge fund portfolios at the end of Q3 2024, according to Insider Monkey’s database. The stakes owned by these funds are worth over $7.1 billion in total. With over 14.6 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
2. UnitedHealth Group Incorporated (NYSE:UNH)
Upside Potential as of January 20: 27.5%
UnitedHealth Group Incorporated (NYSE:UNH) is a Minnesota-based health insurance company that offers a wide range of related services to its consumers. The company recently announced its FY24 earnings and surprised investors with its stellar performance. It posted revenue of $400 billion, up 8% from last year. The company experiences this growth due to its expanded services across the organization. The company’s earnings from operations for the year amounted to $32.3 billion. When excluding costs related to the cyberattack response and impacts in South America, adjusted earnings from operations stood at $34.4 billion.
UnitedHealth Group Incorporated (NYSE:UNH) also met investor expectations with its strong cash flow performance. For the full year, the company generated $24.2 billion in cash flows from operations, which is 1.6 times its net income. Throughout 2024, the company returned more than $16 billion to shareholders through dividends and stock buybacks. In the fourth quarter, the company’s return on equity was 23.7%, demonstrating strong, widespread earnings and an efficient capital structure.
UnitedHealth Group Incorporated (NYSE:UNH) holds a solid dividend track record. The company started paying annual dividends in 1990 and shifted to quarterly payouts in 2010. Since then, it has raised its dividends each year, which makes it one of the best stocks with steady dividends. The company offers a per-share dividend of $2.10 every quarter and has a dividend yield of 1.60%, as recorded on January 20.
Vulcan Value Partners mentioned UNH in its Q4 2024 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated (NYSE:UNH), a company that we have owned several times in the past, is the largest health insurer in the United States. UnitedHealth Group also owns Optum, which is a rapidly growing healthcare services company. The environment for the health insurance business remains positive as growth in healthcare spending, driven by chronic diseases and an aging population will continue to outpace overall economic growth. The insurance business benefits from powerful network effects as more members attract more providers and vice versa, which reinforces United’s value proposition and bargaining power with each side of the network. We respect UnitedHealth Group’s management team and have been very pleased with their long-term vision and execution.”
According to Insider Monkey’s database of Q3 2024, 112 hedge funds owned stakes in UnitedHealth Group Incorporated (NYSE:UNH), compared with 114 in the preceding quarter. These stakes are valued at over $15 billion in total.
1. Comcast Corporation (NASDAQ:CMCSA)
Upside Potential as of January 20: 33.8%
Comcast Corporation (NASDAQ:CMCSA) is an American telecommunications company that offers a wide range of mobile phone and cable TV services. The company is working to expand its broadband services and improve its network infrastructure to keep up with growing consumer and business demands. By December 9, 2024, the company was providing broadband to 63 million homes and aims to reach an additional 1.2 million homes in 2025. A key goal is to deliver 1-gigabit speeds to ensure reliable, high-speed internet for activities like streaming, gaming, and other data-heavy uses. In addition, the company is implementing DOCSIS 4.0 technology, which will enhance broadband performance over hybrid fiber-coaxial (HFC) networks, supporting faster, symmetrical multi-gigabit speeds.
In the third quarter of 2024, Comcast Corporation (NASDAQ:CMCSA) reported strong earnings with $32.07 billion in revenue, marking a 7% increase compared to the same quarter last year. The company saw solid performance, including a 3.6% rise in broadband average revenue per user (ARPU) and a 5% growth in its connectivity segment. The Connectivity & Platforms division achieved an adjusted EBITDA margin of 40.9%. Moreover, Comcast’s hosting of the Paris Summer Olympics significantly boosted Peacock’s revenue and subscriber base, reinforcing NBC’s position as the leading network for the 2023-2024 season.
Comcast Corporation (NASDAQ:CMCSA) maintained a robust cash position in terms of dividends. In the most recent quarter, the company generated over $7 billion in operating cash flow, with free cash flow surpassing $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, in line with previous payouts. With 16 consecutive years of dividend growth, CMCSA is one of the best stocks with steady dividends. The stock supports a dividend yield of 3.35%, as of January 20.
Overall Comcast Corporation (NASDAQ:CMCSA) ranks first on our list of the best dividend stocks with high yields. While we acknowledge the potential for CMCSA as an investment, 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 CMCSA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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