16 Best Dividend Paying Stocks To Buy Now

Published on August 28, 2023 at 9:18 am by Vardah Gill in Dividend Stocks, Hedge Funds, News

In this article, we discuss 16 best dividend paying stocks to buy now. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 5 Best Dividend Paying Stocks To Buy Now.

The investment landscape is continuously evolving this year. It started with the rise of tech stocks. Seven large tech companies represented over two-thirds of the S&P 500’s growth until July. However, this months-long rally stumbled in August and the excitement of consistently witnessing investment profits has faded away. The tech-heavy NASDAQ is down 3.82% in the past 30 days, while it returned 30.84% year-to-date. In this volatile environment dividend stocks continue to gain investors’ attention.

Also read: 10 Dividend Stocks with Over 8% Yield

Investors focus on dividend stocks to increase the overall returns of their investment portfolio by using the dividends to buy more shares. The other reason for adding these stocks to portfolios is to create income for retirement. Instead of reinvesting dividends, retirees could use them as a source of spending money. Essentially, dividend stocks could replace the need for holding cash or bonds. Companies that have sufficient cash flow to consistently pay dividends usually pose lower risks due to their naturally more stable financial performance. Furthermore, the dividend itself can act as a safety net against potential losses.

According to a report by Morningstar, during economic slowdowns that began in July 1981, March 2001, and December 2007, dividend-paying stocks performed better than the overall market. Moreover, in two out of these three periods, their outperformance was quite notable. The report also mentioned that companies with continuous dividend growth streaks tend to outperform the overall market. In the trailing 5 years through July 31, 2022, the dividend growth strategy delivered an annualized return of 9.93%, compared with a 7.56% return of income strategy. The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some of the best dividend stocks as these companies have been raising their payouts for decades.

Photo by Austin Distel on Unsplash

Our Methodology:

For this article, we scanned Insider Monkey’s database of 910 hedge funds and picked the top 16 dividend stocks, which means the stocks mentioned in this list are the most popular dividend-paying stocks among hedge funds as of the second quarter of 2023. The list is ranked in ascending order of the number of hedge funds having stakes in the companies.

16. Oracle Corporation (NYSE:ORCL)

Number of Hedge Fund Holders: 84

Oracle Corporation (NYSE:ORCL) is an American multinational computer technology company that specializes in developing and selling software, hardware systems, and related services. On June 12, the company declared a quarterly dividend of $0.40 per share, which was in line with its previous dividend. It has been raising its dividends consistently for the past eight years, which makes it one of the best dividend stocks on our list. As of August 25, the stock has a dividend yield of 1.39%.

The number of hedge funds tracked by Insider Monkey owning stakes in Oracle Corporation (NYSE:ORCL) jumped to 84 at the end of Q2 2023, from 67 in the previous quarter. The collective value of these stakes is over $3.4 billion.

Madison Investments mentioned Oracle Corporation (NYSE:ORCL) in its Q2 2023 investor letter. Here is what the firm has to say:

“Oracle Corporation (NYSE:ORCL) reported a solid fiscal fourth quarter and provided guidance for the first quarter that continued to support solid growth for the company. Revenues grew 17% and were primarily driven by Cloud Services (up 29%) with Oracle’s cloud infrastructure (OCI) business growing 89% in the quarter. Oracle has messaged that this business has price-performance advantages as compared to the other infrastructure companies (Amazon, Microsoft, Google) and appears to be winning business as a result. On the earnings call, management made the case that OCI will play a significant role in the Generative AI workloads which bodes well for continued growth.”

15. Union Pacific Corporation (NYSE:UNP)

Number of Hedge Fund Holders: 84

Union Pacific Corporation (NYSE:UNP) is a major transportation company in the US. The company is primarily known for its railroad operations, but it also offers various logistics and related services. It currently pays a quarterly dividend of $1.30 per share and has a dividend yield of 2.33%, as recorded on August 25. UNP is one of the best dividend stocks on our list as the company maintains a 16-year track record of consistent dividend growth.

At the end of Q2 2023, 84 hedge funds tracked by Insider Monkey held stakes in Union Pacific Corporation (NYSE:UNP), compared with 85 in the previous quarter. The consolidated value of these stakes is over $4.15 billion. With over 8.2 million shares, Soroban Capital Partners was the company’s leading stakeholder in Q2.

14. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 86

Intuit Inc. (NASDAQ:INTU) is an American tech company that primarily focuses on developing financial and business software solutions for individuals, small businesses, and accounting professionals.

At the end of Q2 2023, the company was a part of 86 hedge fund portfolios, which remained unchanged from the previous quarter, according to Insider Monkey’s database. The stakes owned by these funds have a collective value of over $4.88 billion.

Intuit Inc. (NASDAQ:INTU), one of the best dividend stocks on our list, currently pays a quarterly dividend of $0.78 per share. As of August 25, the stock has a dividend yield of 0.61%.

ClearBridge Investments mentioned Intuit Inc. (NASDAQ:INTU) in its Q2 2023 investor letter. Here is what the firm has to say:

“Taking advantage of post-earnings weakness, we initiated a position in Intuit Inc. (NASDAQ:INTU), a provider of software for small business accounting and tax preparation under the QuickBooks and TurboTax brands as well as personal finance (Credit Karma) and marketing services (Mailchimp). We see a clear path to upside earnings revisions as the company expands new products that increase its total addressable market and drive average revenue per user growth.”

13. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 87

Eli Lilly and Company (NYSE:LLY) is next on our list of the best dividend stocks to buy now. The American pharmaceutical company has a 138-year run of paying uninterrupted dividends to shareholders and also holds a 9-year streak of dividend growth. It currently pays a quarterly dividend of $1.13 per share and has a dividend yield of 0.82%, as of August 25.

Eli Lilly and Company (NYSE:LLY) was a popular stock among hedge funds at the end of Q2 2023 as 87 funds owned stakes in the company, growing from 72 in the previous quarter. The consolidated value of these stakes is over $5 billion.

Baron Funds mentioned Eli Lilly and Company (NYSE:LLY) in its Q2 2023 investor letter. Here is what the firm has to say:

“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company developing and marketing drugs in oncology, diabetes, Alzheimers, immunology, and other diseases. Shares climbed due to continued investor excitement around novel weight loss drugs in the GLP-1 class, including Lilly’s Mounjaro. Given demand that is orders of magnitude more than supply, the full potential of the GLP-1 class of drugs remains unclear, with sales projections eclipsing $100 billion. This number would set a new industry record by a large margin. Drug development in this space is understandably fierce, and as recently as late June, Eli Lilly revealed new data from its diabetes/obesity pipeline assets that will further enhance the value proposition offered to patients. We retain conviction.

In pharmaceuticals, our largest investment continues to be in Eli Lilly and Company. Lilly’s new diabetes drug Mounjaro is on track to be FDA approved for obesity in 2023. At a medical conference in June, Lilly announced Phase 2 clinical data for a next-generation obesity drug called retatrutide, which showed the drug achieved up to 17.5% mean weight loss at 24 weeks in adults with obesity and up to 24.2% mean weight loss at 48 weeks. Lilly also announced Phase 2 clinical data showing its once daily oral drug orforglipron achieved up to 14.7% mean weight loss at 36 weeks in adults with obesity. The results from these pipeline obesity medicines confirmed Lilly’s status as a market leader in the diabetes and obesity category. Also during the quarter, Lilly announced that its drug Donanemab slowed cognitive and functional decline in a Phase 3 study in people with early symptomatic Alzheimer’s disease. We continue to think the company should be able to grow revenue and earnings at attractive rates through the end of the decade and beyond.”

12. The Charles Schwab Corporation (NYSE:SCHW)

Number of Hedge Fund Holders: 88

The Charles Schwab Corporation (NYSE:SCHW) is an American financial services company that offers a range of investment, wealth management, and banking services to its consumers. The company pays a per-share dividend of $0.25 every quarter and has a dividend yield of 1.72%, as of August 25. It is one of the best dividend stocks on our list.

As of the close of Q2 2023, 88 hedge funds in Insider Monkey’s database reported having stakes in The Charles Schwab Corporation (NYSE:SCHW), up from 87 in the preceding quarter. The consolidated value of these stakes is over $4 billion.

An investment management firm, Mairs & Power mentioned The Charles Schwab Corporation (NYSE:SCHW) in its Q2 2023 investor letter. Here is what the firm has to say:

“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and The Charles Schwab Corporation (NYSE:SCHW), which were down 22.09%, 31.65%, and 8.65%, respectively. Charles Schwab was also caught up in the banking selloff in March. The company’s earnings will likely be pressured in the near term from lower deposit balances and higher-cost funding, but we believe these headwinds will eventually abate. In the meantime, the company continues to take share from its competitors thanks to its low-cost position.”

11. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Johnson & Johnson (NYSE:JNJ) holds one of the longest dividend growth streaks in the market. The company has raised its dividends for 61 years running and currently pays a quarterly dividend of $1.19 per share. The stock’s dividend yield on August 25 came in at 2.74%.

The number of hedge funds tracked by Insider Monkey owning stakes in Johnson & Johnson (NYSE:JNJ) grew to 88 in Q2 2023, from 86 in the previous quarter. The collective value of these stakes is over $4.1 billion. With over 4 million shares, Citadel Investment Group was the company’s leading stakeholder in Q2.

10. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 89

Danaher Corporation (NYSE:DHR) is a Washington-based multinational conglomerate known for its diverse portfolio of science and technology-based products and services. The company has been raising its dividends consistently for the past nine years, which makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.27 per share and has a dividend yield of 0.42%, as recorded on August 25.

In the second quarter of 2023, Danaher Corporation (NYSE:DHR) showed a strong cash position. The company’s operating cash flow came in at $1.9 billion and its free cash flow for the quarter amounted to over $1.6 billion.

At the end of June 2023, 89 hedge funds owned investments in Danaher Corporation (NYSE:DHR), according to Insider Monkey’s database. The collective stake value of these hedge funds is over $6.38 billion.

Third Point Management mentioned Danaher Corporation (NYSE:DHR) in its Q2 2023 investor letter. Here is what the firm has to say:

“Danaher Corporation (NYSE:DHR) is our longest held investment and remains a top five position. Danaher has underperformed the S&P 500 this year due to a slowdown in the bioprocessing industry and more cautious spending by biopharma customers. Bioprocessing is a key end-market that drives more than a quarter of Danaher’s profits. Bioprocessing products are the main inputs that biopharma companies use to manufacture biologic drugs, which are the fastest growing category of drugs, growing low-to-mid-teens and representing a sizeable portion of the clinical pipeline. (Click here to read the full text)

9. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 90

Bank of America Corporation (NYSE:BAC) is one of the largest financial institutions in the US. The company offers a wide range of banking and financial services to its consumers. In the second quarter of 2023, it reported revenue of $25.2 billion, which showed a 3% growth from the same period last year. The company distributed over $2.3 billion to shareholders through dividends and share repurchases during the quarter.

Bank of America Corporation (NYSE:BAC), one of the best dividend stocks on our list, has raised its dividends for the past consecutive nine years. Moreover, the company has been making regular dividend payments to shareholders since 1999. It currently offers a quarterly dividend of $0.24 per share and has a dividend yield of 3.37%, as of August 25.

As of the close of the June quarter, 90 hedge funds in Insider Monkey’s database reported having investments in Bank of America Corporation (NYSE:BAC), worth collectively over $31.7 billion. Among these money managers, Berkshire Hathaway owned the largest stake in the company.

8. Thermo Fisher Scientific Inc. (NYSE:TMO)

Number of Hedge Fund Holders: 103

Thermo Fisher Scientific Inc. (NYSE:TMO) is a multinational biotechnology and scientific instruments company that offers a wide range of products and services to support scientific research, healthcare, and various industries.

On July 13, the company declared a quarterly dividend of $0.35 per share, which was in line with its previous dividend. It holds a six-year streak of consistent dividend growth, which makes it one of the best dividend stocks on our list. The stock offers a dividend yield of 0.26%, as of August 25.

Insider Monkey’s database of Q2 2023 indicated that the number of hedge funds owning stakes in Thermo Fisher Scientific Inc. (NYSE:TMO) jumped to 103, from 98 in the preceding quarter. The collective value of these stakes is nearly $7.2 billion.

Weitz Investment Management mentioned Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q2 2023 investor letter. Here is what the firm has to say:

“Portfolio activity this quarter included opportunistically initiating a position in life sciences tool and equipment maker Thermo Fisher Scientific Inc. (NYSE:TMO), a long-time holding of other Weitz portfolios, at an attractive valuation.”

7. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 106

JPMorgan Chase & Co. (NYSE:JPM) is one of the largest and most prominent financial institutions in the world, offering a wide range of financial services to individuals and businesses. The company currently pays a quarterly dividend of $1.00 per share and has a dividend yield of 2.72%, as of August 25.

JPMorgan Chase & Co. (NYSE:JPM) was a part of 106 hedge fund portfolios, according to Insider Monkey’s database. The consolidated value of stakes held by these hedge funds is over $4.3 billion.

6. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 111

UnitedHealth Group Incorporated (NYSE:UNH) ranks sixth on our list of the best dividend stocks to buy. The American healthcare and insurance company has raised its dividend every year since 2010. It currently pays a quarterly dividend of $1.88 per share and has a dividend yield of 1.54%, as of August 25.

As of the close of Q2 2023, 111 hedge funds in Insider Monkey’s database were bullish on UnitedHealth Group Incorporated (NYSE:UNH). The stakes held by these hedge funds have a consolidated value of over $10.1 billion. Rajiv Jain’s GQG Partners was the company’s largest stakeholder in Q2.

Click to continue reading and see 5 Best Dividend Paying Stocks To Buy Now.

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Published on October 30, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

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Click to continue reading…

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