In this article, we will discuss some of the best income dividend stocks.
When it comes to income investing, dividend stocks are often the first choice for investors. These stocks offer regular payouts to shareholders, which are seen as a way to steadily increase income over time. This approach is backed by data. A report from Hartford Funds revealed that dividends have accounted for 39% of total returns on average since the 1940s. The report also highlighted that stocks with high dividend payouts have not only outperformed other dividend-paying stocks but have done so with lower volatility.
Income factor plays a crucial role in investing, as it can significantly boost overall returns, helping investors achieve the portfolio growth needed to meet their financial objectives. A study by Eagle Investment Management highlighted the income potential of dividend-paying stocks. The study compared the returns of a hypothetical $1,000,000 investment made on December 31, 2012, in the Dividend Aristocrats Index—composed of companies that have consistently raised their dividends for 25 years—with the broader market, assuming dividends were reinvested. According to the report, by 2022, the $1,000,000 investment in Dividend Aristocrats would have generated $93,212 in income, compared to just $55,726 from the market. This stark difference emphasized the greater income potential of dividend aristocrats over the broader market. Although this is a historical example, it underscores the importance of not only prioritizing dividends but also focusing on their growth to enhance a portfolio’s income stream over time.
Also read: 12 Best REIT Dividend Stocks To Buy for 2024
Dividend investing is not a quick path to success; it requires patience and a long-term approach. Over time, high-yielding dividend stocks tend to outperform those that don’t pay dividends. According to the French Data Library, while non-dividend-payers may lead the market in certain years, they generally fall short in the long run. Dividend-payers, especially those with higher yields, have consistently outperformed non-payers and even the broader market. The report, which examined returns from 1927 to 2023, found that non-dividend-payers delivered an annualized return of 8.7%, while high-yield stocks returned 10.9%. In comparison, the overall market returned 9.7% during the same period.
The report outlined several reasons why dividend-paying stocks tend to outperform others. According to the report, investing in dividend-payers helps filter out the most speculative stocks, as these companies are usually well-established and confident in their cash flow, allowing them to return cash to shareholders. Moreover, dividend-payers are more commonly found in the value segment of the market, and stocks with lower prices and expectations have historically performed well. Dividend payers often build a loyal shareholder base, as investors relying on income from their holdings are less likely to sell due to negative news. Lastly, committing to paying dividends fosters discipline within companies. Executives, tempted by the prospect of using excess cash for acquisitions or speculative projects, are instead compelled to act cautiously and prioritize maintaining dividend payouts. For this reason, investors tend to focus on companies with a proven history of strong dividend growth and high yields. In this article, we will further take a look at some of the best income stocks to buy according to analysts.
Our Methodology:
To compile this article, we screened for stocks known for their consistent dividend track records and sustained shareholder payouts over an extended period. This group reflects stability and long-term performance in dividend payouts. 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. The stocks are ranked according to their upside potential, as of December 13. We also considered hedge fund sentiment around each stock in Insider Monkey’s database, as of the third quarter of 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).
16. McDonald’s Corporation (NYSE:MCD)
Upside Potential as of December 13: 10.2%
McDonald’s Corporation (NYSE:MCD) is an American multinational fast food company. The company has been grappling with difficulties for a while, stemming from war-related boycotts and an E. coli outbreak linked to its restaurants. This outbreak, which reportedly involved contaminated onions in its burgers, resulted in over 90 illnesses and one fatality. However, the company remains a potential long-term investment, as improving economic conditions could drive higher demand and bolster future sales. In the past 12 months, the stock has surged modestly by nearly 1%.
During the third quarter of 2024, McDonald’s Corporation (NYSE:MCD) generated $6.87 billion in revenue, reflecting a 3% increase compared to the same quarter in the previous year. Over the past twelve months, systemwide sales to loyalty members across approximately 50 loyalty markets surpassed $28 billion, with nearly $8 billion achieved in the latest quarter alone. These figures suggest that the company remains stable and retains opportunities to enhance its performance further.
Carillon Tower Advisers highlighted the company’s performance in its Q3 2024 investor letter. Here is what the firm has to say:
“McDonald’s Corporation (NYSE:MCD) performed well as it met the expectations of investors looking for improvements in relative market share trends. The company’s introductions of menu items at premium- and medium-price tiers are picking up pace, allowing it to capture value more effectively.”
On September 26, McDonald’s Corporation (NYSE:MCD) announced a 6% hike in its quarterly dividend to $1.77 per share. Through this increase, the company stretched its dividend growth streak to 48 years, which makes MCD one of the best dividend stocks on our list. The stock’s dividend yield on December 13 came in at 2.39%.
At the end of Q3 2024, 60 hedge funds tracked by Insider Monkey held stakes in McDonald’s Corporation (NYSE:MCD), compared with 67 in the previous quarter. The overall value of these stakes is more than $2.3 billion. Among these hedge funds, Adage Capital Management was the company’s leading stakeholder in Q3.
15. Oracle Corporation (NYSE:ORCL)
Upside Potential as of December 13: 10.7%
Oracle Corporation (NYSE:ORCL) is a Texas-based computer software company. The company reported strong earnings in fiscal Q2 2025. Its revenue of $14.06 billion showed a 9% growth from the same period last year. Cloud revenue, encompassing both Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS), reached $5.9 billion, marking a 24% increase in both USD and constant currency. Within this segment, cloud infrastructure revenue (IaaS) totaled $2.4 billion, reflecting a robust 52% growth in both USD and constant currency. Oracle Cloud revenue is projected to exceed $25 billion for the current fiscal year.
Mar Vista Investment Partners, LLC also highlighted Oracle Corporation (NYSE:ORCL)’s could business in its Q3 2024 investor letter. Here is what the firm said:
“Oracle Corporation (NYSE:ORCL) is seeing revenue acceleration as it benefits from several years of investing in cloud-based solutions, which are now driving demand. The company is seeing broad-based demand for multiple of its cloud offerings, including its Fusion ERP Suite, its NetSuite offering and the Oracle Database. In addition to those anchor products, Oracle is also gaining traction with its OCI Gen 2 platform-as-a-service offering, which is winning mindshare from leading cloud customers, including Open AI, due to its favorable performance and cost metrics. This OCI Gen 2 solution is well-positioned to become a viable hyper scaler offering, furthered by Oracle’s recently announced partnerships with Microsoft Azure, Google Compute Platform, and Amazon’s AWS, which have all agreed to host Oracle’s flagship database in their respective hyper-scaler cloud environments. We believe this could support a third leg of growth for Oracle as its large installed base of database customers shift from on-premises to cloud deployments. As database customers migrate to a Cloud subscription model, Oracle could increase database software support revenues by 3-to-5 times. We continue to believe Oracle is well-positioned to grow intrinsic value strong double-digits over our investment horizon.”
Renowned for its top-tier data center infrastructure vital to AI development, Oracle Corporation (NYSE:ORCL) is experiencing demand that far outpaces its supply. Its efficient operations have made it a favored partner for prominent AI start-ups, including OpenAI, Cohere, and Elon Musk’s xAI. Despite its efforts, the company is still struggling to meet this high demand, with 162 data centers either operational or under construction as of the first quarter of fiscal 2025. To address this, Oracle plans a significant expansion, aiming to increase the number of data centers to between 1,000 and 2,000 in the future. The stock is delivering solid returns this year, surging by over 67% since the start of 2024.
On December 9, Oracle Corporation (NYSE:ORCL) declared a quarterly dividend of $0.40 per share, which was consistent with its previous dividend. The company has never missed a dividend since 2009. These dividend payments are supported by its strong cash flow. Over the last 12 months, its operating cash flow was $20.3 billion and its free cash flow was $9.5 billion. The stock supports a dividend yield of 0.92%, as of December 13.
As of the close of Q3 2024, 91 hedge funds tracked by Insider Monkey held stakes in Oracle Corporation (NYSE:ORCL), compared with 93 in the previous quarter. The consolidated value of these stakes is more than $7 billion.
14. Union Pacific Corporation (NYSE:UNP)
Upside Potential as of December 13: 10.99%
Union Pacific Corporation (NYSE:UNP) is a Nebraska-based transportation company that operates railroads, connecting 23 states. Railroads offer an exceptionally efficient method for transporting goods over land, and Union Pacific plays a key role in moving a variety of bulk commodities. This diversified revenue base provides some balance to the company’s income, but its performance remains tied to economic cycles. When the economy is strong, demand for products like agricultural goods, industrial materials, and energy rises, boosting the need for the company’s services. Conversely, during economic slowdowns, demand for these goods typically declines. Despite this cyclical nature, railroads generally maintain high operating margins regardless of economic conditions.
In the third quarter of 2024, Union Pacific Corporation (NYSE:UNP) reported revenue of $6.01 billion, which showed a 1% growth from the same period last year. Freight revenue, excluding fuel surcharge income, experienced a 5% increase, driven by a 6% rise in revenue carloads. The company’s operating income reached $2.4 billion, reflecting an 11% growth.
Union Pacific Corporation (NYSE:UNP) also demonstrated a strong cash position. In the first nine months of the year, the company reported an operating cash flow of $6.7 billion, up from $5.9 billion in the prior year period. Its free cash flow for the period also jumped to $1.8 billion, from $955 million in the same period last year. The company has consistently remained committed to its shareholder obligation, paying uninterrupted dividends to investors for 125 years straight. It currently pays a quarterly dividend of $1.34 per share and has a dividend yield of 2.26%, as of December 13.
Insider Monkey’s database of Q3 2024 indicated that 78 hedge funds held stakes in Union Pacific Corporation (NYSE:UNP), compared with 82 in the previous quarter. The collective value of these stakes is over $4.48 billion. Among these hedge funds, Fisher Asset Management was the company’s leading stakeholder in Q3.
13. General Mills, Inc. (NYSE:GIS)
Upside Potential as of December 13: 11.9%
With an upside potential of nearly 12%, General Mills, Inc. (NYSE:GIS) ranks thirteenth on our list of the best dividend stocks. The American food processing company also markets processed consumer food through retail stores. Recently, BofA upgraded the stock to Buy from Neutral. The firm maintained an optimistic outlook on the company, noting its strategic efforts to stimulate growth, which could help restore its valuation to typical levels. Analyst Peter Galbo emphasized positive developments in the pet segment and stabilization within the North American retail division. Galbo’s team anticipates that General Mills will achieve a quicker and more sustainable pace of organic sales growth compared to other center-store food companies.
In fiscal Q1 2025, General Mills, Inc. (NYSE:GIS) posted revenue of $4.85 billion, a slight 1% decline from the same period last year but beating analysts’ expectations by $47.6 million. The company achieved an operating profit of $832 million. By enhancing its core operations and offering consumers more engaging experiences, it improved sales volumes, net sales, and market share trends compared to the previous quarter. Additionally, the company progressed in reshaping its portfolio to drive growth and profitability by announcing plans to sell its North American yogurt business to Lactalis and Sodiaal.
General Mills, Inc. (NYSE:GIS), one of the best dividend stocks, has been rewarding shareholders with growing dividends for the past 125 years. This strong dividend history can be attributed to the company’s solid cash generation. In the most recent quarter, the company generated $624 million in operating cash flow, growing from 378 million in the same quarter last year. It also returned $338 million to investors through dividends. Currently, it offers a quarterly dividend of $0.60 per share and has a dividend yield of 3.58%, as of December 13.
With a collective stake value of more than $674 million, 30 hedge funds held positions in General Mills, Inc. (NYSE:GIS) in Q3 2024, as per Insider Monkey’s database. In the previous quarter, 29 funds held investments in the company.
12. The Kraft Heinz Company (NASDAQ:KHC)
Upside Potential as of December 13: 14.32%
The Kraft Heinz Company (NASDAQ:KHC) is an Illinois-based food company that specializes in a wide range of snacks and beverages. Formed through the merger of Kraft and Heinz, two iconic names in the food industry, the company boasts a strong portfolio of brands, an extensive distribution network, and effective marketing capabilities, making it a trusted partner for retailers globally. Although the merger didn’t yield the anticipated results, the company is now pursuing a new strategy, which involves eliminating underperforming products and placing greater emphasis on its key offerings.
Mairs & Power also highlighted The Kraft Heinz Company (NASDAQ:KHC)’s transformation in its Q3 2024 investor letter. Here is what the firm has to say:
“We added The Kraft Heinz Company (NASDAQ:KHC) to the Fund in the quarter. Kraft Heinz is a leading global food company which possesses a portfolio of iconic brands, including its eponymous ketchup brand. The company has been undergoing an operational transformation focused on driving efficiency gains in supply chain, manufacturing and distribution. These efficiency gains have fueled increased investments in technology, automation, innovation and marketing, which should ultimately drive more consistent organic revenue growth and high single digit earnings per share growth. We expect above-average long-term returns, buoyed by consistent free cash flow generation, opportunistic share repurchases and an attractive 4-5% dividend yield. A modest current valuation affords an ample margin of safety.”
In the third quarter of 2024, The Kraft Heinz Company (NASDAQ:KHC) reported revenue of $6.38 billion, marking a 2.85% decline from the same period last year. However, its gross profit margin improved by 20 basis points, reaching 34.2%. The company remained focused on investing in marketing, research and development, and technology to provide value-driven solutions for consumers and foster future revenue growth. These initiatives are backed by its proven ability to streamline operations and generate strong cash flow. In addition, the company is dedicated to expanding both its well-established and emerging food and beverage brands globally.
The Kraft Heinz Company (NASDAQ:KHC) reported a solid cash position for the most recent quarter. Its year-to-date operating cash flow reached $2.8 billion, reflecting a 6.7% increase compared to the same period last year. The company generated $2 billion in free cash flow, marking a 9.7% year-over-year growth. Additionally, it returned $1.5 billion to shareholders through dividends during the first nine months of the year. The company currently offers a quarterly dividend of $0.40 per share and has a dividend yield of 5.01%, as of December 13.
Insider Monkey’s database of Q3 2024 showed that 38 hedge funds held stakes in The Kraft Heinz Company (NASDAQ:KHC), compared with 43 in the previous quarter. The overall value of these stakes is more than $12 billion. Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q3.
11. S&P Global Inc. (NYSE:SPGI)
Upside Potential as of December 13: 14.36%
S&P Global Inc. (NYSE:SPGI) is an American capital market company that specializes in financial information and analytics. The company seeks to maintain a diversified revenue stream by leveraging different segments such as Ratings, Market Intelligence, Commodity Insights, and Indices, ensuring growth and stability even in volatile markets. It has recently focused on technological innovation, integrating generative AI and launching tools like ChatAI. Furthermore, strategic moves like divesting PrimeOne and acquiring Visible Alpha have strengthened its portfolio and reinforced its core capabilities. Since the start of 2024, the stock has surged by nearly 16%.
In Q3 2024, S&P Global Inc. (NYSE:SPGI) reported revenues of $3.6 billion, reflecting a 16% increase compared to the same quarter last year. The company continues to benefit from the steady cash flow generated by its data and analytics division, in addition to its ratings segment. Year-to-date, the company has generated nearly $4 billion in operating cash flow, a significant rise from $2.4 billion during the same period in the previous year.
Aristotle Atlantic Partners, LLC highlighted S&P Global Inc. (NYSE:SPGI)’s strong performance in its Q3 2024 investor letter. Here is what the firm has to say:
“S&P Global Inc. (NYSE:SPGI) contributed to portfolio performance in the third quarter, driven by growth in corporate bond issuance and refinancing activity, with expectations for further acceleration if interest rates decline. The company has also achieved better-than-expected expense and revenue synergies from its acquisition of IHS Markit.”
S&P Global Inc. (NYSE:SPGI) is a reliable investment for income investors as the company has raised its payouts for 52 years in a row. Its current quarterly dividend comes in at $0.91 per share and has a dividend yield of 0.72%, as of December 13.
At the end of the third quarter of 2024, 85 hedge funds held stakes in S&P Global Inc. (NYSE:SPGI), compared with 90 in the previous quarter, as per Insider Monkey’s database. These stakes are collectively valued at over $9.8 billion. With more than 10.4 million shares, TCI Fund Management was the company’s leading stakeholder in Q3.
10. NIKE, Inc. (NYSE:NKE)
Upside Potential as of December 13: 17.13%
NIKE, Inc. (NYSE:NKE) is a multinational footwear and apparel company that offers products for men, women, and children. The company has established significant investor confidence over the years, but it has faced challenges in recent times. To overcome these obstacles, NIKE is adopting new strategies, including the appointment of a new CEO. This leadership change brings back Elliott Hill, a long-time company veteran who retired in 2020 after serving as president of global commercial and marketing operations. With his wealth of experience and proven success, the company aims to rejuvenate its strategies and chart a successful path forward.
In fiscal Q1 2025, NIKE, Inc. (NYSE:NKE) posted revenue of $11.6 billion, marking a 10% decline compared to the same quarter last year. The company saw an 8% drop in wholesale revenue, which totaled $6.4 billion. However, its cash position remained robust, with cash and cash equivalents rising to $8.5 billion from $6.2 billion in the previous year. Over the last twelve months, the company generated $7.9 billion in operating cash flow.
NIKE, Inc. (NYSE:NKE) is a strong dividend payer, having raised its payouts for 23 consecutive years. The company offers a quarterly dividend of $0.40 per share and has a dividend yield of 2.08%, as of December 13. Analysts anticipate an upside potential of over 17% for NKE, which makes it one of the best dividend stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in NIKE, Inc. (NYSE:NKE) jumped to 75 in Q3 2024, from 66 in the previous quarter. The total value of these stakes is more than $5.12 billion.
9. Linde plc (NASDAQ:LIN)
Upside Potential as of December 13: 17.63%
Linde plc (NASDAQ:LIN) is a global industrial gases and engineering company. It provides a wide range of gases to industries like healthcare, manufacturing, energy, food and beverage, chemicals, and electronics. The company is a solid dividend payer because of its cash position. In the most recent quarter, it reported an operating cash flow of $2.73 billion, reflecting an 8% increase compared to the same period last year. Its free cash flow amounted to $1.66 billion. In the quarter, the company returned $1.3 billion to shareholders through dividends and stock buybacks. It maintains a 31-year streak of consistent dividend growth and offers a quarterly dividend of $1.39 per share. The stock has a dividend yield of 1.28%, as of December 13.
Despite ongoing economic challenges in the third quarter, Linde plc (NASDAQ:LIN) posted strong results, with a 9% increase in EPS, a rise in ROC to 25.8%, and a 130 basis point improvement in operating margins, reaching 29.6%. While managing short-term performance, the company also secured its largest-ever sale-of-gas project, expanding its project backlog to $10 billion. This achievement supports future growth in the traditional industrial gas sector while maintaining its commitment to disciplined investment practices. The stock is up by 6.26% in 2024 so far.
Linde plc (NASDAQ:LIN) posted revenue of $8.4 billion for the third quarter of 2024, reflecting a 2.46% increase compared to the same time last year. The company exceeded analysts’ expectations by $9.33 million. Its operating profit was $2.1 billion, with an operating profit margin of 25%.
Mar Vista Investment Partners, LLC mentioned LIN in its Q3 2024 investor letter. Here is what the firm has to say:
“Linde plc (NASDAQ:LIN) is the world’s largest, global industrial gas producer. The company enjoys the highest profit margins and returns on capital in the industry. Linde’s primary products are atmospheric gases and process gases. Industrial gases have benefitted from secular growth trends in decarbonization and carbon sequestration. Moreover, the opportunity in blue and green ammonia and hydrogen are substantial. Projects in these areas are quickly being added to its backlog for future growth. We see these secular trends as long-term positives for Linde and the entire industrial gas industry.
Linde believes it can grow its volumes with new applications; the buildout of small, on-site plants using its technologies; and focusing on growing geographies such as India, Malaysia, Vietnam, China and Brazil. Despite the long-term growth opportunities, recent demand trends have slowed due to weak global industrial production and a challenging year-over-year comparable. Among the regions, the U.S. remains resilient, with volumes flat to slightly negative. Europe, Latin America, the Middle East, and China are all sending mixed to negative economic signals. We believe these slower trends are transitory in nature, providing an opportunity to purchase shares in Linde at attractive prices.”
According to Insider Monkey’s database of Q3 2024, 63 hedge funds owned stakes in Linde plc (NASDAQ:LIN), which remained unchanged from the previous quarter. These stakes are worth over $3.6 billion in total.
8. Exxon Mobil Corporation (NYSE:XOM)
Upside Potential as of December 13: 18.5%
Exxon Mobil Corporation (NYSE:XOM) is an American multinational energy company. The company has caught the attention of investors in 2024, with its stock rising over 8% since the beginning of the year. It holds a strong portfolio of high-quality assets. The company’s diverse operations, including exploration, production, refining, marketing, and specialty chemicals, provide a significant edge by mitigating risks and optimizing cash flow through its global network.
Exxon Mobil Corporation (NYSE:XOM) reported impressive performance in the third quarter of 2024, generating $90.02 billion in revenue, surpassing analysts’ expectations by $1.66 billion. The company continues to lead in carbon capture and storage, recently securing a new agreement that raises its annual CO2 offtake commitments to 6.7 million metric tons—outpacing all competitors in the sector. Exxon also showed strong financial health, reporting $17.6 billion in operating cash flow and $11.3 billion in free cash flow for the quarter. Moreover, it returned $9.8 billion to shareholders through dividends and stock repurchases.
Exxon Mobil Corporation (NYSE:XOM) is one of the strongest dividend payers in the market, growing its payouts by 42 consecutive years. Currently, the company offers a quarterly dividend of $0.99 per share and has a dividend yield of 3.57%, as of December 13.
At the end of Q3 2024, 86 hedge funds in Insider Monkey’s database held stakes in Exxon Mobil Corporation (NYSE:XOM), compared with 92 in the previous quarter. The consolidated value of these stakes is roughly $7 billion. First Eagle Investment Management was one of the company’s leading stakeholders.
7. Nutrien Ltd. (NYSE:NTR)
Upside Potential as of December 13: 19.8%
Nutrien Ltd. (NYSE:NTR) is a Canadian fertilizer company and one of the largest potash producers in the world. The stock is down by nearly 10% since the start of 2024. The company’s challenges are reflective of broader issues in the agricultural sector, including falling crop prices and global trade disruptions caused by geopolitical tensions. However, its diverse portfolio, which spans potash, nitrogen, and phosphate products, offers some protection against market volatility. Additionally, Nutrien’s investment in digital technologies and sustainable farming practices places it in a strong position to benefit from long-term industry trends.
In the third quarter of 2024, Nutrien Ltd. (NYSE:NTR) reported revenue of $5.09 billion, which fell by over 5% from the same period last year. The company experienced higher potash sales volumes and reduced operating costs during the first nine months of 2024. This was achieved by leveraging the strengths of its six-mine network and global distribution capabilities to meet rising customer demand. The company is also witnessing strong crop nutrient demand in North America for the fall application season, following a period of reduced field activity in the third quarter.
Nutrien Ltd. (NYSE:NTR) is one of the best dividend stocks for income investors as the company has raised its payouts for five consecutive years. The company offers a quarterly dividend of $0.54 per share and supports a dividend yield of 4.40%, as recorded on December 13.
Nutrien Ltd. (NYSE:NTR) was included in 33 hedge fund portfolios at the end of Q3 2024, compared with 35 in the previous quarter, according to Insider Monkey’s database. The consolidated value of these stakes is more than $411.7 million. Among these hedge funds, Millennium Management was one of the company’s leading stakeholders in Q3.
6. NextEra Energy, Inc. (NYSE:NEE)
Upside Potential as of December 13: 21.2%
NextEra Energy, Inc. (NYSE:NEE) is an American renewable energy company. It is one of the largest utility companies in the US, primarily operating regulated electric utilities in Florida, with Florida Power & Light being its largest subsidiary. Florida’s ongoing population growth has driven an increase in the utility’s customer base. However, this growth has required significant investment to meet the rising demand. Regulators, who prioritize reliable service for customers, are typically supportive of the company’s spending efforts to accommodate the expanding population. The stock has surged by over 19.5% since the start of 2024.
In the third quarter of 2024, NextEra Energy, Inc. (NYSE:NEE) reported revenue of $7.57 billion, up by 5.6% from the same period last year. The company delivered another impressive quarter in renewable energy and storage development, adding roughly 3 gigawatts (GW) to its project backlog for the second quarter in a row. Over the past four quarters, the company has secured a total of approximately 11 GW in new projects.
Madison Investments made the following comment about NextEra Energy, Inc. (NYSE:NEE) in its Q3 2024 investor letter:
“The top contributors in the quarter were NextEra Energy, Inc. (NYSE:NEE), Oracle Corporation, Progressive Corporation, Equifax Inc., and United Healthcare. NextEra has continued to perform well given its strong position in the renewable energy space, increasing demand for power, its transmission capabilities, as well as a tailwind from lower interest rates.”
On October 18, NextEra Energy, Inc. (NYSE:NEE) declared a quarterly dividend of $0.515 per share, which was in line with its previous dividend. Overall, the company has raised its payouts for 28 consecutive years. As of December 13, the stock has a dividend yield of 2.8%. With an upside potential of over 21%, NEE is one of the best dividend stocks on our list.
Of the 900 hedge funds in Insider Monkey’s database at the end of Q3 2024, 69 funds held stakes in NextEra Energy, Inc. (NYSE:NEE), compared with 73 in the previous quarter. The total value of these stakes is over $2.47 billion. With over 12.7 million shares, GQG Partners was the company’s leading stakeholder in Q3.
5. UnitedHealth Group Incorporated (NYSE:UNH)
Upside Potential as of December 13: 21.4%
UnitedHealth Group Incorporated (NYSE:UNH) ranks fifth on our list of the best dividend stocks. According to analysts, the American multinational healthcare and insurance stock has an upside potential of 21.4%. This analyst’s response might catch investors off guard, given the company’s recent difficulties following the tragic murder of its CEO, Brian Thompson. The long-term implications of this event for the health insurance sector remain unclear. For now, the situation has drawn considerable national attention, with many investors seemingly surprised by the intensity of the public backlash against the company. The stock has fallen by over 2.3% since the start of 2024.
That said, UnitedHealth Group Incorporated (NYSE:UNH) generated strong earnings in the third quarter of 2024. The revenue of $100.8 billion grew by 9.16% from the same period last year. The company’s commercial domestic offerings have seen significant growth, adding 2.4 million consumers so far this year. Its projected net earnings for the full year 2024, estimated at $15.50 to $15.75 per share, take into account the divestiture of its South American operations during the first half of the year, as well as the impacts of the Change Healthcare cyberattack.
PGIM Jennison Health Sciences Fund mentioned UNH in its Q3 2024 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated (NYSE:UNH) is the largest health care services company in the U.S. The company offers healthcare benefits to Americans who receive insurance from employers or government-based programs such as Medicare and Medicaid. Half of the company is represented from non-benefits businesses under the Optum umbrella. This includes a technology business that helps hospitals, pharma companies, and other payors. It also includes a fast-growing provider business where Optum owns surgery centers and urgent care centers. The company’s primary care business continues to grow and it’s participating in the emerging trend of primary care taking on risk and acting like an insurance company. Finally, UnitedHealth owns a drug benefits manager. The company continues to have high quality and well-positioned businesses. In the first half of ’24, UnitedHealth has beat earnings expectations and confirmed full year financial guidance. While medical costs have pressured results, the company has cut a lot of spending to support earnings. We have also seen volatility in the stock related to political dynamics; a view that Republicans are better for this group helped support the stock in June and July and a moderation in policy views from the democratic nominee also helped support the stock. Future catalysts for the company and the stock include potentially stabilizing cost trend, a calmer political environment, and visibility into the company’s long-term earnings growth targets.”
UnitedHealth Group Incorporated (NYSE:UNH) has raised its payouts for 15 years in a row. The company currently pays a quarterly dividend of $2.10 per share and has a dividend yield of 1.59%, as of December 13.
As per Insider Monkey’s database of Q3 2024, 112 funds held stakes in UnitedHealth Group Incorporated (NYSE:UNH), down from 114 in the previous quarter. These stakes are worth more than $15 billion in total.
4. Becton, Dickinson and Company (NYSE:BDX)
Upside Potential as of December 13: 22.21%
Becton, Dickinson and Company (NYSE:BDX) is a New Jersey-based medical device company that also specializes in instrument systems and reagents. In fiscal year 2024, the company made progress on its strategic initiatives, focusing on transitioning its portfolio toward higher-growth sectors. This effort included introducing new innovations and acquiring Edwards Lifesciences’ Critical Care product group. Additionally, the company utilized its BD Excellence system to surpass targets for margin expansion, earnings, and cash flow.
Becton, Dickinson and Company (NYSE:BDX) reported revenue of $5.4 billion in fiscal Q4 2024, which showed a 6.9% growth from the same period last year. The company’s BD Medical remained the winner among its segments, generating over $2.8 billion in revenues, up 11.1% from the prior-year period.
Becton, Dickinson and Company (NYSE:BDX) also showed a strong cash position in FY4. The company’s operating cash flow came in at $3.8 billion, up 28.5% on a YoY basis. Its free cash flow also jumped by 47.4% YoY to $3.1 billion. This strong cash generation has made the company a generous dividend payer. It raised its quarterly dividend by 9.5% on November 7 to $1.04 per share. This marked the company’s 53rd consecutive year of dividend growth, which makes BDX one of the best dividend stocks on our list. The stock has a dividend yield of 1.84%, as of December 13.
As of the close of Q3 2024, 52 hedge funds in Insider Monkey’s database held stakes in Becton, Dickinson and Company (NYSE:BDX), compared with 65 in the preceding quarter. The consolidated value of these stakes is nearly $3.2 billion.
3. Comcast Corporation (NASDAQ:CMCSA)
Upside Potential as of December 13: 23.4%
An American multinational telecommunications company, Comcast Corporation (NASDAQ:CMCSA) ranks third on our list of the best dividend stocks. In addition to analysts’ projections of an upside potential of over 23%, CMCSA also remained popular among elite funds in the third quarter of 2024, according to Insider Monkey’s database. 72 funds held stakes in the company in Q3, growing significantly from 61 in the previous quarter. These stakes are collectively valued at over $5.44 billion.
Comcast Corporation (NASDAQ:CMCSA) posted $32.07 billion in revenue for the third quarter of 2024, marking a 7% increase compared to the same quarter in the previous year. The company demonstrated solid performance, with broadband ARPU increasing by 3.6% and a 5% rise in its connectivity segment. Adjusted EBITDA margins for the Connectivity & Platforms division reached 40.9%. Additionally, Comcast successfully hosted the Paris Summer Olympics, achieving significant growth in Peacock’s revenue and subscriber base, while reinforcing NBC’s position as the leading network for the 2023-2024 season.
Despite reporting strong earnings, Comcast Corporation (NASDAQ:CMCSA) is down by nearly 9% since the start of 2024. The company’s performance has been underwhelming, offering little incentive for investors to engage this year. The results were seen as a short-term boost rather than a sign of sustainable growth, leaving investors unimpressed.
That said, Comcast Corporation (NASDAQ:CMCSA) maintained a solid cash position from a dividend perspective. In the latest quarter, the company generated over $7 billion in operating cash flow and reported free cash flow exceeding $3.4 billion. Furthermore, it returned $1.2 billion to shareholders through dividends, cementing its status as one of the best dividend stocks on the list. The company has been growing its dividends for 16 consecutive years and pays a quarterly dividend of $0.31 per share. As of December 13, the stock has a dividend yield of 3.11%.
2. Mondelez International, Inc. (NASDAQ:MDLZ)
Upside Potential as of December 13: 26.11%
Mondelez International, Inc. (NASDAQ:MDLZ) is an American food, beverage, and confectionery company that prides itself on having an extensive portfolio of recognizable brands. The company remains committed to driving growth in its core business while strategically restructuring its portfolio. A notable example is its strengthened partnership with Evirth, a prominent cake and pastry producer in China.
Mondelez International, Inc. (NASDAQ:MDLZ) reported $9.2 billion in revenue for the third quarter of 2024, reflecting a 2% increase from the previous year and surpassing analysts’ expectations by $84.8 million. The company’s management remains focused on strategic growth, including reinvesting in popular brands like Oreo, expanding US distribution, and exploring mergers and acquisitions in Europe. Its collaboration with Lotus Biscoff is projected to enhance chocolate sales in Europe while strengthening its biscuit segment in India. These efforts bode well for the company’s future, and if the current momentum continues, investors could see further dividend increases.
Mondelez International, Inc. (NASDAQ:MDLZ) is known for its consistent dividend payments, supported by strong cash flow that signals the potential for future dividend growth. In the first nine months of the year, the company generated $3.5 billion in operating cash flow, with free cash flow reaching $2.5 billion. Additionally, it returned nearly $3 billion to shareholders through dividends and share buybacks. As a result, MDLZ stands out as one of the best dividend stocks. On December 11, the company declared a 10.65% hike in its quarterly dividend to $0.47 per share. This marked the company’s 11th consecutive year of dividend growth. The stock has a dividend yield of 3.02%, as of December 13.
The number of hedge funds tracked by Insider Monkey owning stakes in Mondelez International, Inc. (NASDAQ:MDLZ) grew to 51 in Q3 2024, from 47 in the previous quarter. The consolidated value of these stakes is over $1.66 billion. With over 3.7 million shares, Arrowstreet Capital was the company’s leading stakeholder in Q3.
1. Eli Lilly and Company (NYSE:LLY)
Upside Potential as of December 13: 32.12%
Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company that manufactures and develops a wide range of medicines for serious ailments. In fiscal Q4 2024, the company reported $11.4 billion in revenue, marking a 20.5% increase from the same quarter last year. The company saw strong growth from Mounjaro and Zepbound, as well as a significant 17% rise in non-incretin revenue. This overall growth, driven by its oncology, immunology, and neuroscience portfolios, was compared to the results from Q3 2023.
Eli Lilly and Company (NYSE:LLY) received encouraging news for its weight loss programs, as President Joe Biden recently suggested expanding Medicare and Medicaid coverage to include these medications. If the proposal is approved, it could make these treatments accessible to millions more patients, potentially leading to a significant increase in sales. Although the proposal’s outcome is still uncertain, the market remains hopeful about the potential advantages for Eli Lilly. Due to these positive developments, the stock has surged by over 33.4% since the start of 2024.
Aristotle Atlantic Partners, LLC made the following comment about LLY in its Q3 2024 investor letter.
“Eli Lilly and Company (NYSE:LLY) is a leading pharmaceutical company that develops diabetes, oncology, immunology and neuroscience medicines. The company generates over half of its revenue in the U.S. from its leading drugs Trulicity, Verzenio and Taltz. The company operates in a single business segment: human pharmaceutical products.
Eli Lilly has a deep pipeline in treatment areas focused on metabolic disorders, oncology, immunology and central nervous system disorders. Currently, there are two phase-three assets: orforglipron, an oral GLP-1, and retatrutide, a triple incretin agonist, which could possibly expand upon the potential success of Mounjaro. We believe that Mounjaro has the potential to commercialize beyond Type 2 diabetes and obesity, potentially in the areas mentioned above of heart disease, sleep apnea, fatty liver disease and chronic kidney disease. We believe the premium valuation is supported by this outsized growth profile.”
On December 10, Eli Lilly and Company (NYSE:LLY) hiked its quarterly dividend by 15.4% to $1.50 per share. Through this increase, the company stretched its dividend growth streak to 11 years, earning it a reputation as one of the best dividend stocks. The stock offers a dividend yield of 0.76%, as of December 13.
The number of hedge funds tracked by Insider Monkey holding stakes in Eli Lilly and Company (NYSE:LLY) increased to 106 in Q3 2024, from 100 in the previous quarter. The total value of these holdings now exceeds $18.5 billion.
Overall, Eli Lilly and Company (NYSE:LLY) ranks first on our list of the best dividend stocks. While we acknowledge the potential for LLY 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 LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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