5 Best 5% Dividend Stocks To Buy According To Hedge Funds

In this article, we will discuss 5 best dividend stocks according to hedge funds with over 5% yield. If you want to read our detailed analysis of dividend stocks and their performance over the years, go directly to read 10 Best 5% Dividend Stocks To Buy According To Hedge Funds.

5. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 61
Dividend Yield as of November 28: 5.81%

AT&T Inc. (NYSE:T) is a Texas-based multinational telecommunications company that mainly provides mobile telephone services to its consumers. Raymond James upgraded the stock to Strong Buy in October with a $24 price target, appreciating the company’s current operating performance.

In the third quarter of 2022, AT&T Inc. (NYSE:T) reported growth in nearly its all segments. The company’s wireless service revenues and broadband revenues were up by 5.6% and 6.1% from the same period last year, respectively. Its operating cash flow for the quarter came in at $10.1 billion and its free cash flow stood at $3.8 billion. The company’s dividend payout ratio came in at a healthy 52.3%, which makes it one of the best dividend stocks on our list.

AT&T Inc. (NYSE:T) currently pays a quarterly dividend of $0.2775 per share and has a dividend yield of 5.81%, as of November 28. The company has been raising its dividends consistently for the past 23 years.

At the end of Q3 2022, 61 hedge funds tracked by Insider Monkey owned stakes in AT&T Inc. (NYSE:T), up from 55 a quarter earlier. The collective value of these stakes is over $1.53 billion.

Chartwell Investment Partners mentioned AT&T Inc. (NYSE:T) in its Q2 2022 investor letter. Here is what the firm has to say:

“In the Dividend Equity accounts, the three best performers in Q2 includes AT&T (NYSE:T, 2.5%), up 17.1%. AT&T completed the spin of the WarnerMedia business (HBO, CNN, etc.), and the market seemed to like the “back-to-basics” approach. Also, the telco business is expected to do relatively well in an inflationary environment.”

4. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 62
Dividend Yield as of November 28: 6.69%

Verizon Communications Inc. (NYSE:VZ) offers voice, data, and video streaming services to its consumers through its wide range of networks and platforms. The company is one of the best dividend stocks on our list as it has raised its payouts consistently for the past 16 years. It currently pays a quarterly dividend of $0.6525 per share for a dividend yield of 6.69%, as of November 28.

Verizon Communications Inc. (NYSE:VZ) has shown a strong cash position this year so far. In the first nine months, the company’s operating cash flow came in at $28.2 billion while its free cash flow for the period stood at $12.4 billion. It generated $34.2 billion in revenue in Q3 2022, which showed a 4% growth from the same period last year.

In October, Morgan Stanley appreciated the growth in Verizon Communications Inc. (NYSE:VZ)’s wireless and postpaid segments. In view of this, the firm maintained an Equal Weight rating on the stock with a $41 price target.

Verizon Communications Inc. (NYSE:VZ) saw growth in hedge fund positions in Q3 2022, as 62 funds in Insider Monkey’s database owned stakes in the company, up from 58 in the previous quarter. The collective value of these stakes is over $1.42 billion. Citadel Investment Group is the company’s leading stakeholder in Q3.

Mawer Investment Management mentioned Verizon Communications Inc. (NYSE:VZ) in its Q3 2022 investor letter. Here is what the firm has to say:

“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) has been impacted as wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”

3. Philip Morris International Inc. (NYSE:PM)

Number of Hedge Fund Holders: 63
Dividend Yield as of November 28: 5.17%

Philip Morris International Inc. (NYSE:PM) is a New York-based multinational tobacco company that sells its products in over 180 countries. In the third quarter of 2022, the company reported revenue of $8.03 billion, which beat Street estimates by $730 million. At the end of September, it had $5.3 billion available in cash and cash equivalents, compared with $4.4 billion nine months ago. For FY22, the company expects to generate $10.5 billion in operating cash flow.

Philip Morris International Inc. (NYSE:PM) is one of the best dividend stocks on our list as the company has been raising its dividends since its IPO in 2008. The company currently pays a quarterly dividend of $1.27 per share for a dividend yield of 5.17%, as recorded on November 28.

Argus upgraded Philip Morris International Inc. (NYSE:PM) to Buy in November with a $110 price target, as the company is exploring smoke-free business ideas and considering alternative means to produce risk-free products.

The number of hedge funds tracked by Insider Monkey owning positions in Philip Morris International Inc. (NYSE:PM) jumped to 63 in Q3 2022, from 56 in the previous quarter. These funds hold a collective stake value of over $4.68 billion.

Artisan Partners mentioned Philip Morris International Inc. (NYSE:PM) in its Q2 2022 investor letter. Here is what the firm has to say:

“On the positive side of the ledger, our top contributor was Swedish Match, a Swedish tobacco and nicotine products maker. The company received an all-cash takeover offer from rival Philip Morris International Inc. (NYSE:PM), which we also held in the portfolio, for SEK 106 per share—a 35% premium to Swedish Match’s prior closing share price. The deal is a good fit for PM as it reduces PM’s dependence on cigarettes—a category in steady decline—and accelerates the company’s transition to smokeless “reduced-risk” products (RRPs)—a category that has experienced rapid growth over the past five years. PM can also leverage its global scale to generate significant revenue synergies from these complementary product sets, as well as quickly gain access to the US market—the world’s largest market for RRPs and one where regulators have embraced RRPs and other less harmful nicotine products. We exited our position in Swedish Match as shares approached the takeout price.”

2. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 69
Dividend Yield as of November 28: 5.00%

Intel Corporation (NASDAQ:INTC) is a multinational semiconductor company, based in California. Mizuho resumed its coverage of the stock with a Neutral rating and a $32 price target in November. The firm highlighted that the company is gaining market share in personal computers this year.

In the third quarter of 2022, Intel Corporation (NASDAQ:INTC) reported an EPS of $0.59, which beat estimates by $0.26. The company’s revenue for the quarter came in at $15.3 billion, which fell in line with the analysts’ consensus. For the next quarter, it expects its revenue to be between $14 billion to $15 billion.

Intel Corporation (NASDAQ:INTC) currently pays a quarterly dividend of $0.365 per share. The company has been raising its dividends consistently for the past seven years while maintaining a 28-year track record of dividend payments. The stock’s dividend yield on November 28 came in at 5.00%.

As of the end of the September quarter, 69 hedge funds owned stakes in Intel Corporation (NASDAQ:INTC), up from 65 in the previous quarter. These stakes have a total value of roughly $2 billion. With over 15 million shares, Two Sigma Advisors was one of the company’s leading stakeholders in Q3.

ClearBridge Investments mentioned Intel Corporation (NASDAQ:INTC) in its Q3 2022 investor letter. Here is what the firm has to say:

“Also on the detractor side, Intel Corporation (NASDAQ:INTC) delivered a disappointing revenue miss and lowered full-year revenue and earnings guidance as COVID-19-driven demand for PCs abated (where Intel enjoys half its sales) and a delay in its flagship Sapphire Rapids CPU hurt its data center business. Despite these issues, we still believe Intel is an economically sensitive turnaround story with substantial upside.”

1. Chesapeake Energy Corporation (NASDAQ:CHK)

Number of Hedge Fund Holders: 70
Dividend Yield as of November 28: 9.74%

Chesapeake Energy Corporation (NASDAQ:CHK) is an American exploration and production company with headquarters in Oklahoma. On November 11, the company declared a 36.2% growth in its quarterly dividend to $3.16 per share. As of November 28, the stock has a dividend yield of 9.74%.

In October, Jefferies initiated its coverage on Chesapeake Energy Corporation (NASDAQ:CHK) with a Buy rating and a $150 price target. The firm gave a positive view of the energy transition companies.

In Q3 2022, Chesapeake Energy Corporation (NASDAQ:CHK) reported an EPS of $5.06, which surpassed estimates by $0.58. The company’s operating cash flow came in at $1.3 billion and generated $773 million in adjusted free cash flow. It also returned $1.9 billion to shareholders in dividends and share repurchases during the quarter, which makes it one of the best dividend stocks on our list.

Of the 920 hedge funds tracked by Insider Monkey, 70 funds owned stakes in Chesapeake Energy Corporation (NASDAQ:CHK) in Q3 2022, up from 67 in the previous quarter. These stakes are worth over $4.1 billion collectively.

Miller Value Partners mentioned Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter. Here is what the firm has to say:

“Chesapeake Energy Corporation (NASDAQ:CHK) gained 19.1%² in the period. The company reported 2Q22 Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and Exploration Expense (EBITDAX) of $1,269MM, +195.8% Y/Y, ahead of consensus of $1,226MM, and Adjusted Earnings per Share (EPS) of $4.87, compared to 2Q21 EPS of $1.64, ahead of analyst expectations for EPS of $3.82. Chesapeake generated adjusted free cash flow (FCF) of $494MM, bringing TTM FCF to $1,663MM, or a FCF yield of 14.4%. Management also raised the company’s base dividend by 10% to $2.20/share, bringing the total quarterly dividend to $2.32/share, or an annualized yield of ~9.7%. Additionally, the company doubled its existing share repurchase authorization from $1B to $2B and has executed $670MM in repurchases so far through 7/31/22. Collectively, management is guiding for $1.2B in total FY22 dividends, at the midpoint, and $1B in share buybacks, implying total FY22 shareholder returns of $2.2B, or ~19.1% of the company’s market cap.”

You can also take a look at 15 Best Dividend Stocks of All Time and 12 Best High-Yield Dividend Stocks To Buy Now

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